Liz McManus (Wicklow, Labour)
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Question 87: To ask the Minister for Finance the number and percentage of income earners who are paying tax at the higher rate and the standard rate for 2005; the anticipated figures for each category for 2006; and if he will make a statement on the matter. [12383/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that the information requested by the Deputy is as follows:

The numbers of income earners above have been rounded to the nearest hundred as appropriate. The numbers of income earners are based on actual data for 2002 projected forward in accordance with macroeconomic data relating to actual and expected growth in incomes and employment. The percentages are expressed in terms of the numbers of all income earners on the income tax record, including those who are exempt. It should be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.

The changes made in budget 2006, in particular the widening of the standard rate bands by €2,600, representing an increase of just under9%, will ensure that over 90,000 taxpayers will be removed from the higher rate of tax for 2006. This measure will also ensure that those earning on or below the estimated average industrial wage for 2006 will pay tax only at the standard rate.

I would also like to point out to the Deputy that the Government's tax policies since 1997 have ensured that Ireland now has the lowest tax wedge in the EU, and one of the very lowest in the entire OECD as measured by that organisation using comparative data relating to those earning an average production wage. In addition, after-tax income, adjusted for CPI inflation, for a person on the average industrial wage, is now about 44% higher than it was in 1997. About half of this increase is due to lower taxes.