Caít Keane (Fine Gael) | Oireachtas source

I welcome the Minister of State. It is great to see him here again. We are in a very different place from this time last year when we spoke and it is thanks to the Government's policies. When Forbes magazine says Ireland is the best country in the OECD in which to do business we must be doing something right. That has a lot to do with business. Governments do not create jobs. Business is putting us back on the right foot. We have seen growth in employment, trade and inward tax investment exceed Government projections. This is all good news.

I listened from upstairs to what the Minister said, so I will not go through much of the Bill. As spokesperson on the environment it struck me that the tax relief on home improvement will create jobs but will also be good for the environment as people insulate their houses. Senator Reilly quoted the Nevin Economic Research Institute, NERI, on how poorly we were faring. What she said did not measure up to what I have been reading, which states that Ireland is a very progressive country regarding taxation. The OECD and ESRI conclude that the Irish tax system is very progressive. It hits high earners very hard and has a relatively low or no tax on average incomes. A single self-employed person on €120,000 will hand over 44.8% of his or her income and a married couple fares a little better on 41.2%. The numbers for PAYE workers are becoming similar to the self-employed and that is a mark of the success of this Government in alleviating some of the tax reliefs on that. Tax on an income of €175,000 has risen to 46%.

By any standards, including comparison with our major trading partners and competitors, these tax rates are high and kick in at relatively much lower income in this country compared with our European neighbours. The numbers support other studies from the OECD and ESRI. When we add all the other taxes together, such as property tax, the high earners hand over 60% or more of their income in tax. That is an average all-in rate of tax, not a marginal rate. This raises some questions. If we want people to work and provide jobs for others we cannot tax them at 100% because that tells them this is not a good country to do business in and we will not have Forbes magazine saying Ireland is the best country in the OECD to do business. It would not say that if we did not have a progressive tax system.