Richard Bruton (Dublin North Central, Fine Gael)
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Question 259: To ask the Minister for Finance the number of persons on the minimum wage who are estimated to be paying income tax in 2006. [36664/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The current minimum wage is €7.65 per hour. On an annualised basis, this is equivalent to €15,515 assuming a 39 hour working week. The present entry point to income tax under the PAYE system is €15,600 per annum for a single person under 65. The position is, therefore, that no employee who benefits from entitlement to the employee (PAYE) tax credit in addition to the basic personal tax credit will be subjected to income tax in 2006. However, a small number of persons with income at or below the current minimum wage annualised who do not have entitlement to the employee tax credit are likely to be liable for a small amount of income tax in 2006. This group comprises, in the main, proprietary directors.

Richard Bruton (Dublin North Central, Fine Gael)
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Question 260: To ask the Minister for Finance the cost of exempting persons on the minimum wage from income tax in 2007. [36665/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The current minimum wage is €7.65 per hour. In Budget 2006, I increased the combined value of the employee credit and the basic personal credit to a level which ensures that a single PAYE person earning the minimum wage in its annualised form pays no tax. The matter of a new minimum wage rate which might apply in 2007 is currently before the Labour Court. Therefore, it is not possible at this point to give an estimate of the cost as requested by the Deputy.

Richard Bruton (Dublin North Central, Fine Gael)
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Question 261: To ask the Minister for Finance the cost of achieving the target in 2007 that only 20% of persons in the income tax net would pay tax at the 42% rate; and the value of the standard rate cut-off point which would then apply for single, one parent, married one earner, and married two earner families. [36666/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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It is estimated that of the 2.16 million taxpayers on the tax record, just under 36% are exempt from tax as low earners, 32% have their tax computed at a marginal rate of 20% and just under 32% have a computed marginal rate of 42%. If one looks, however, at effective tax rates actually paid by taxpayers, there are many who are nominally liable at the higher rate of tax but who effectively pay tax at no more than they would at the standard rate of tax. It is estimated that, allowing for this effect, the latest data indicate that for 2006 about 80% of income earners pay tax at no more than the standard rate. Put another way, tax credits fully offset the 42% liability in the case of all but about 20% of income earners. For 2007, allowing for wages growth and before any Budget day changes, it is estimated that around 77% of income earners would actually pay tax at no more than the 20% rate. The cost of bridging the remaining 3% gap will vary depending on the extent to which bands and credits are increased in value. As the Deputy will be aware, it has been the practice of successive Ministers for Finance not to comment on what may or may not be contained in upcoming Budgets and I do not intend to depart from this approach on this occasion.

The following figures show the progress in reducing tax paid in effective terms in the last ten years:

Richard Bruton (Dublin North Central, Fine Gael)
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Question 262: To ask the Minister for Finance the number of income tax payers paying at the 20% and the 42% rate and the number exempt or on marginal relief in 2006 according to the latest estimates; and if he will provide the same information in respect of 2007 on a pre-budget basis. [36667/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that the most up-to-date estimates of the information requested by the Deputy are as follows:

Many income earners pay no tax at all; many pay tax at a standard rate but pay a much lower average rate because of the application of credits. And for many taxpayers who are, strictly speaking, liable for tax at the higher rate on part of their income, the amount of their liability at the higher rate is fully offset by their tax credits. In fact, tax credits fully offset the 42% liability in the case of all but about 20% of all income earners. Effectively, therefore, many of the "top rate" taxpayers actually pay at an average rate of 20% or less.