Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

When you take the progressivity of all these measures, the effective tax rate of someone on €25,000 has gone from 12.5% to 9.4% in five years. That is a low-income worker. Someone on €35,000 has gone from 17.1% to 14.4%. Someone on €40,000 has gone from 20.9% to 16%. Someone on €50,000 has gone from 26.4% to 20.6%. I can go on. It demonstrates the progressivity of all the tax changes we have made across a number of budgets. In budget 2025, the adjustments to personal tax credits of €125 will benefit a lot of low- and middle-income workers. The cumulative changes we have made to USC over two years from 4.5% to 3% will significantly benefit low- and middle-income workers. This demonstrates the progressivity of the overall tax system. It is also important to adjust the point at which people enter the higher rate of tax, and that is why we sought to increase the band from €42,000 to €44,000. The mean annual earnings have changed and are published by the CSO every year. The Deputy is referencing median annual earnings, but we continue to monitor wage growth within the economy. Just in excess of €50,000 is the mean annual income, recently published in August. The design of our income tax package was on reducing USC from 4% to 3% - a welcome change for many workers in our economy. There were changes to personal tax credits and the standard rate. Is it the Deputy's preference to leave the standard rate and not reward work in our economy? Is that his position? This was welcomed by many workers across our economy who have seen their wages rise and who want to be rewarded for the work they do. That is why it was important to get a blend of all three measures for workers across our economy. It is demonstrated in the progressivity of the changes I have referenced. Taking the cumulative impact of the tax package this Government has made, the effective tax rate is 9.4% for someone on €25,000 and significantly increases across higher income streams. It demonstrates the wider progressivity of the decisions we have taken from the perspective of income tax.

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