Kathryn Reilly (Sinn Fein) | Oireachtas source

I move recommendation No. 2:

In page 16, between lines 32 and 33, to insert the following:“15. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on options on introducing a third rate of tax payable at 47 per cent on income over €100,000.”.

We are used to doing the dance on this recommendation. It has been made in this and the other House on numerous occasions and we are all very familiar with the arguments for and against it. The Minister of State knows what I will say and I know what he will say but God loves a trier. At the heart of the recommendation that a report be produced on options to introduce a third rate of tax, payable at 47% on income over €100,000, is the question of how to have an income tax rate that would allow people work to hard and take home more money that would allow them to live comfortably, while contributing more. It would put a brake on the growth of the income chasm between the and poor that we discussed on Second Stage. We need to ask ourselves how this could be done in a way that would not penalise people on middle incomes and who might be squeezed. On every €1 over €100,000 we suggest an extra 7 cent should go into the State's finances which would have the effect of creating a more equal society, putting a brake on the growing disparity in incomes and bringing hundreds of millions of euro into the State’s finances to address some of the problems being experienced by those in the lowest third of the population’s earners.

On Committee Stage in the Dáil my colleague, Deputy Peadar Tóibín, related this to the concept of price elasticity saying there was not necessarily a linear relationship between tax or price and behaviour. He said if people were asked if they would be happy to pay a little more tax in order to have a health service in which patients would not wait on trolleys, 90 year olds would not have to wait days and children would not be forced to take painkillers for tooth pain because they had been waiting months for dental surgery, most would say they would be willing to pay a little extra if necessary and if they could afford it. This recommendation proposes that those on high incomes could contribute 7 cent more.