Finian McGrath (Dublin North Central, Independent)
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Question 241: To ask the Minister for Finance his views on the injustice to single income families and the entry point to the 42% tax rate as adjusted in budget 2006; and if he will make a statement on the matter. [12941/06]

Seán Haughey (Dublin North Central, Fianna Fail)
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Question 255: To ask the Minister for Finance his views on the widening gap between a married couple with one income and a married couple with two incomes due to tax individualisation; if this gap is set to widen further; the reason for this taxation policy; if same will be reviewed; and if he will make a statement on the matter. [13420/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 241 and 255 together.

The standard rate band for a married single earner couple was substantially increased in value in budget 2006 by €2,600 per annum from €38,400 to €41,000. The standard band for a single person was also increased by €2,600 per annum from €29,400 to €32,000. As a result of the changes, a single earner may earn up to €32,000 in 2006 before paying the higher rate of tax. A married single earner couple may earn up to €41,000 before facing tax at the higher rate and a married dual earner couple may earn up to €64,000 before facing the higher rate of tax.

All categories of taxpayer benefited from the income tax changes in budget 2006. No taxpayer has been disadvantaged relative to their former position. The changes reflect a consistent approach by the Government to ease the tax burden on income earners, which has seen the average tax rate fall for all taxpayers, married or single, since 1997. We are well to the fore in this regard compared to other tax regimes.

In fact, the most recent data available from the OECD show that, in 2005, a married single income couple with two children on average earnings in Ireland has the lowest tax wedge in the entire OECD. In addition, when cash transfers from the State are taken into account, such couples face a negative burden in Ireland because they receive more in the cash transfers than they pay out in social security contributions. Ireland is unique in the OECD in this respect. These data do not even take into account the further changes in budget 2006 including, for example, the introduction of the early child care supplement and increases in child benefit payments.

This bears out the fact that this Government has radically improved the position of all taxpayers and single income taxpayers as well since 1997.