Róisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

I move amendment No. 7:

In page 15, between lines 6 and 7, to insert the following: “Report on third rate of income tax

10.The Minister shall, within six months of the passing of this Act, produce a report on the potential for the introduction of a 43 per cent income tax rate on all individuals with incomes in excess of €100,000, with appropriate uplifts for married couples, as a means of maintaining progressivity in the income tax system, and the estimated annual revenue which such a rate would generate.

I express concern about the charade of people coming in and taking time to make points for whatever reason and then withdrawing amendments or, indeed, not turning up for the amendments. It makes a bit of a mockery out of the whole process and this is a long enough process anyway. It is not good practice. It is a recent development and a regrettable one.

I am speaking to my amendments Nos. 7 and 8 on taxation generally. We heard talk a moment ago about the progressive nature of our tax system. We have a progressive tax system, but it is becoming less progressive and that is especially as a result of the next year's budget and this year's budget. What has happened is those at the higher end of the income spectrum are getting greater tax breaks and tax relief relative to those at the lower end. I do not see how that can possibly be anything but a widening of the gap. If the rich are getting richer and the poor are getting poorer, even relatively, that is widening the gap and means our taxation system is becoming less progressive. That is a very backward way to be going about things and it does not make for fair politics, a fair taxation system or a fair society. The principle underpinning a fair society is people pay tax according to their means and, in return, they should have access to good quality public services. That is how we create a cohesive, fair and progressive society.

I am surprised Fianna Fáil is going along with widening the gap between rich and poor and undermining the progressive nature of the tax system. It is the kind of thing we expect from Fine Gael. We hear it much of the time from various Fine Gael backbenchers and, indeed, frontbenchers as well. The Taoiseach does a lot of that dog-whistling by talking about people who get up early in the morning and all that kind of thing, without appreciating the scale of the issue of low incomes in the country. We have a very serious problem with that whereby people get up very early in the morning, work very hard and come home to take-home pay that is very poor. They are the people who need to be lifted by the tax system, not the people at the higher end. There are umpteen examples within the recent budget of changes made to the tax code as well as other measures that mean the higher a person’s earnings, the more they get out of the budget. That is the wrong way for it to be and it should not be like that.

Last year and a number of times this year, I have referred to the fact that in this House we are very well paid. All TDs are well paid. Obviously, junior and senior Ministers are exceptionally well paid and fair enough, as this is not a personal thing, but is there any justification for a Minister to get substantial money back from tax changes and on top of that get cash payments by way, for example, of the energy payments?It is quite outrageous, to be honest. No Members of this House should be getting any kind of breaks from the budget. Whatever about equal breaks right across the income spectrum, while we are getting huge breaks and large amounts of additional money back into our pockets our constituents on middle and lower incomes are only getting a fraction of what we are. What is the rationale for that? What is the defence of it? It makes for a less equal and less fair country and that is not the direction we should be going in.

The point I am making here is on the need for a report. If there is an increase in the point at which people pay the higher rate of tax and also improvements to the two main tax credits, why should people earning in excess of €100,000 get a benefit from that? I accept it can be difficult to target tax breaks, but one key way of doing that is a proposal the Social Democrats made. We believe it is the only fair way of raising the point at which people pay the higher rate of tax and increasing the tax credits, namely, at a higher level where individual incomes are over €100,000, there should be a clawback mechanism. If the Minister can tell me why any Member of this House should be getting money back into their pocket from tax changes in the budget and indeed the energy credits, I would like to hear it because I do not know what the justification for it is. Will he tell us what the thinking is in Government about people in our category of income getting that kind of relief? We in the Social Democrats strongly believe there must be a clawback for higher earners.

In our view, the best way of getting that clawback is through the introduction of a third rate of income tax. Nobody should be penalised on income below €100,000 but there should certainly be a clawback in respect of income over €100,000. People should not continue to get tax benefits when they do not need them. That is the key point. Government decisions are resulting in people who do not need extra money or support from Government getting it. That is wrong and it should not be happening. That is why I am asking for a clawback in respect of income over €100,000. Next time around, I will talk about the importance of refundable tax credits.

See this speech in context