Michael McDowell (Independent) | Oireachtas source

I accept the removal of USC from the earnings range as mentioned by Senator Gavan in his recommendation would have serious Exchequer consequences, but let us remember that USC was brought in as a temporary measure, as was income tax, by the way, to pay for the Napoleonic wars. I fully take the point that USC is a very wide-ranging levy on incomes and if we go back to the 20% and 40% rates that are referred to in the table to the section to which this recommendation is being made, we should remember it was the aim of Government to reduce the fundamental tax structure in this country from one where the marginal rates of taxes were very high to a simple 40%-20% tax structure that everybody could understand. In the course of the recent referendum on the family, I had the opportunity to look at the Murphy tax decision about the treatment of married people, which goes back to the 1970s. I invite any member of this House who is not standing for election and has half an hour to spare to go back over that decision. The Supreme Court recites that in the 1970s the top rate of income tax was 80%. Those kinds of tax rates are simply counterproductive.

Even when they were 48% and 60%, I remember as a member of Fine Gael having differences with Garrett FitzGerald and Alan Dukes in Dublin South-East when I was chairman of their constituency party and saying the rates of tax were confiscatory. Garrett Fitzgerald's response was to say they were not high enough, and he was backed up on that by Alan Dukes.

Low rates of tax do work if they are applied across the board. That is the point I am making. I will reiterate this point as I had only five minutes before on Second Stage. We have to have a system that really affects people and that you cannot opt out of in its entirety just because you are very wealthy. The time has come to take a look at non-domiciled persons, non-DOMs, in Ireland, a serious look at the people who leave this these shores to live elsewhere in Europe in more tax-friendly climates because they want to avoid the taxation consequences of income, capital asset acquisitions and capital gains they have made in Ireland. It does seem to me that if you want to be an Irish citizen, a philanthropist and to contribute as little as you possibly can to the Irish Exchequer, it makes sense to do what the British Labour Party is proposing, which is to take a look at non-DOMs and tell them they cannot have their cake and eat it.You cannot have assets producing substantial wealth for you in Ireland and own substantial amounts of land in Ireland, and do a lot of things which only the very wealthy in Ireland can aspire to do and, at the same time move yourself offshore and live a tax-free existence when your secretary, gardener, caretakers or whoever you employ in Ireland, to look after your business empire, are taxed to the hilt, especially by the USC. I really do think that the Government should act on this. The structure that I would suggest for doing it would be one which at the very least would say to the super wealthy, who have been Irish citizens and remain qualified by virtue of owning assets in this country beneficially, that they must pay a basic rate of tax on their income across the world, regardless of where they live be it Malta, Portugal or wherever they go. I suggest that we say to them that if they want to be Irish citizens and own business assets and land assets in Ireland that they should pay a significant contribution just in the same way as all of the employees they have left behind in Ireland must pay while earning much more modest incomes to keep these wealthy people in the happy situation that they can live tax free while owning very substantial wealth in this State.