Michael McDowell (Independent) | Oireachtas source

I want to endorse what Senator Horkan said. We are not talking about the ultra rich when we are talking about people who are paying the marginal rate rather than the standard rate. I agree with Senator Devine that there should probably be minimum effective tax rates for everybody in this country. I would probably go further and say that there should be minimum effective tax rates for every citizen of Ireland who has assets in this country, no matter where he or she decides to live for the time being, subject to double taxation agreements. I do not believe it is a good idea to discourage the provision of pensions by people, many of whom are by no means considered wealthy, yet who are paying at the marginal rate rather than the standard rate. What is being proposed by Senator Higgins to achieve tax equity is too blunt an instrument. I am fully in favour of tax equity but I do not believe this is the right way to do it. I ask everybody to remember that those who are getting public sector pensions are in a very different and much more favourable position than many people in the private sector. Many self-employed people are not wealthy professionals but are people doing market gardening, electrical contracting, timber harvesting and things like that. They have to be looked after as well. I say that as somebody who has forgone a substantial ministerial and Dáil pension to be here. I know the value of that pension and that I could never have got that in the private sector no matter what I had done and no matter what I had contributed to whatever fund. I am not receiving it at the moment and make do on my other earnings. Although I am in that happy position, I know the value of a public sector pension compared with a private sector one. I ask people who level their weapons at private sector pensions not to extrapolate from the figures that the great majority of this relief goes to people on high earnings. Of course, it does because those people are paying a huge amount of tax and they are bound to ask professional advisers what to do to minimise their tax burden. However, there are very significant constraints on the amounts that one can put into pension funds. It is not as simple as it is made out. If one goes over that amount, one hits effective tax rates of 70% and 80%. This is not as easy as it is made out to be.In any event I agree with Senator Horkan and do not agree with this recommendation.