Leo Varadkar (Dublin West, Fine Gael)
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Question 128: To ask the Minister for Finance the cost of reducing the higher rate of income tax by 1% to 40% for all taxpayers affected and for all earnings less than €70,000 per annum single or corresponding married; and if he will make a statement on the matter. [42505/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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It is assumed that the threshold for the proposed new tax bands mentioned by the Deputy would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents and married couples. I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2011 incomes, of reducing the higher rate of tax by 1% point would be approximately €185 million in a full year. If this rate reduction is confined to income earners whose gross incomes are below the income levels mentioned in the question the cost could be reduced to €65 million in a full year.

These figures are an estimate from the Revenue tax-forecasting model using actual data for the year 2008 adjusted as necessary for income and employment trends for the year 2011. They are therefore provisional and likely to be revised.