Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

That is a very important statistic. One could argue that we should continue to go after that group of people at the top who pay a marginal tax rate of 41% plus 11%, between USC and PRSI. It is 52%. On €32,500 one is whacked on everything. Anyone earning more that is whacked on 52%. A self-employed person is whacked on 56%. The first thing the previous Government had to do was to whack up the tax rates because in any radical adjust programme the first thing changed is tax, surprise, surprise. In each year of the last decade we were merrily going on our way, taking in approximately €50 billion in tax annually and then in 2008 €16 billion was knocked out. No other western European economy or industrialised society has seen such a reduction in tax revenue over a 12-month period. We went from an economy taking in €50 billion in tax to an economy taking in approximately €34 billion. The first task of any government would be to whack up the tax and reduce the expenditure. Inevitably, the first phase of this adjustment process was skewed in favour of tax changes with a more radical reduction in expenditure in the second phase of it.

We must have a debate on progressiveness because the facts are not known, as evidenced by the recent The Irish Times opinion poll. Thanks to the attempts by this and the previous Government, we have a much more progressive tax system.

According to the OECD we have the second most progressive tax system of the 37 member states. The European Commission examined the former bailout countries in terms of what they went through and argued the adjustments in this country were the most progressive as those at the top have paid more than those at the bottom and rightly so. The view, not of the Government parties or the ESRI but the international community, is the adjustment process under way has been a good deal more progressive in this country than is the case in others.