John Minihan (Progressive Democrats)

I am delighted to second this motion but would like to expand on a few specific points. The motion, which is concerned primarily with taxation policy and issues of fairness, gives us an opportunity to inject some reality into the debates about our choices for society and sustaining our recent progress.

There is no doubt that a dose of reality is required. For example, the Opposition recently referred to the "PD-ification" of society. Apparently this refers to planning around the priority of getting everyone into the workplace and an electronic and closed gate society. The Opposition would have us believe that the Progressive Democrats should not be surprised that social capital has been broken up and the sense of community has been reduced because that was our intention. While this wacky view is more to be pitied than ridiculed, more sinister allegations have been made in the other House to the effect that tax breaks have been sold to consultants and developers by the Tánaiste.

This debate allows us the opportunity to clearly and unequivocally reject these sinister and erroneous claims. Most important, the public and taxpayers deserve to know which party's policies have served this society well and which have endangered the prosperity and progress achieved by the Irish public. The Progressive Democrats recognise the important role the tax system has played in transforming our economy. That economic transformation has brought increased employment, higher incomes and living standards and reduced poverty.

However, that same tax system should not permit a wealthy person to avoid paying income tax. For this reason, we seek the examination of measures to preclude some of the wealthiest individuals in Irish society from availing of property and other tax incentives so as to avoid paying any income tax while at the same time enjoying facilities and services provided by the State. Progressive Democrats also seek a cap on the total allowances a person can claim from property and other relevant tax incentives. As Senator Dardis clearly noted, we support low tax but not a situation where no tax is paid regardless of income.

The Opposition would have us believe that hard pressed lower and modest income families bear the tax burden in this economy and that hundreds, if not thousands, of fat cat high income and tax savvy individuals are availing of tax relief schemes to dodge tax. Who can blame it for these claims? It needs them to be true in order to convince the electorate, which I suspect is more sophisticated than the Opposition credits, to reverse our progress. However, the Opposition is wrong.

The Revenue Commissioners' annual statistical report reveals that higher earners pay far more than lower earners. By reforming the tax code, we have restored a situation last experienced in the 1960s. Higher earners, rather than those on modest or low incomes, pay the majority of tax. The top 25% of income earners pay 80% of the total income tax revenue.

Many of the tax reliefs referred to by the Opposition are inherent to the tax system and have been designed to provide some relief for the taxpayers in whose interests the Opposition claims to act. Examples of these include mortgage interest and medical expenses reliefs and pension contributions. Which of these tax loopholes would the prospective alternative Government close off? Other reliefs on depreciation, interest and accumulated trade losses protect and promote employment and enterprise. Which of these unjust tax schemes would the allegedly pro-business parties opposite discontinue?

No doubt the Opposition will call foul and will claim that the €8 billion cost of tax relief schemes is exploited exclusively by the aforementioned tax savvy individuals. The reality is that ordinary taxpayers and business people avail of these schemes. Nevertheless, there are schemes, reputed to cost €200 million per year, which are designed to incentivise economic and social development.

As the motion makes clear, we welcome the announcement last December of the thorough examination of the effect of all the relevant incentive reliefs and exemptions and the intention to bring forward proposals to deal with any problems. I remind Members of the call for "Low tax, yes, not no tax for the highest earners".

On the issue of high earners, I read with my usual scepticism of Sinn Féin's reported economic policies, which include a 50% tax rate for those earning more than €100,000 a year. Do these economic gurus realise that the economic progress and prosperity propelled by our tax system has seen the number of workers earning more than €100,000 a year multiply dramatically in recent years? There were 13,200 such earners in 2001. Now more than 50,000 workers earn more than €100,000 a year. We can imagine how thrilled those 50,000 individuals and their families must be to read Sinn Féin's proposal that they pay a 50% tax rate.