Gerald Nash (Louth, Labour) | Oireachtas source

I support Deputy Shortall's proposition. We have a progressive tax system, which has been defended under successive Administrations even in the toughest of times. That is something that we, as a country, should be very proud of. However, the reality is that the kinds of changes introduced by the Minister in this Bill see that progressivity fraying at the edges. Looking at the direction of travel and at some of the arguments made by his party colleagues with regard to the diminution and narrowing of the tax base, I question his commitment to a progressive tax system and whether such a commitment exists at all under Fianna Fáil. Is it just a fiction? We understand the direction of travel and where the Minister wants to position himself ahead of the next general election. From a public policy point of view, it is not a good place.

Day in, day out, we hear about the concerns of the Minister and his colleagues regarding our excessive reliance on corporation tax revenue, which are correct. We also understand the excessive reliance on the great amount of revenue coming into the Exchequer's coffers through VAT and know about our reliance on income tax from employees in a very small and concentrated number of multinational corporations. Despite this, budget after budget, we see that tax base narrowing. The Commission on Taxation and Welfare has called for a broadening of the tax base given those vulnerabilities but, time and time again, we see that tax base being eroded and becoming narrower by the year.

Deputy Shortall has mentioned, as Deputy Doherty did earlier, the way in which the operation of the tax changes the Minister proposed in the budget and which have found their way into this Bill will disproportionately affect the very highest income earners in this country. There is a way to ensure the progressivity of the system is protected and that is by introducing the kinds of clawbacks Deputy Shortall is proposing. It has been done in the past. For example, the top rate of tax was adjusted with the benefits being limited to people who earn under €65,000 or €70,000 through an increase in the USC as it applied to the portion of income over €65,000 or €70,000. That is one way to do it. That was done back in 2015. The changes can be targeted, if the Minister was minded to do so, to give a break - I use that term advisedly - to middle earners. He has not done that, however. I am concerned about the narrowing of the tax base and, on a practical level, he should be more concerned about it. As I said earlier, we have heard him emoting in the media about the vulnerabilities of the tax base, yet he is chipping away at it all of the time. That should be of concern to all of us.

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