John Lyons (Dublin North West, Labour)
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Question 131: To ask the Minister for Finance the steps he intends to take to implement a minimum effective tax rate of 30% for very high earners, the additional revenue he believes this would generate for the Exchequer; and if he will make a statement on the matter. [22396/11]

Michael Noonan (Limerick City, Fine Gael)
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The existing restriction of reliefs, or horizontal measure is activated where individuals have an adjusted income of €125,000 and claim specified reliefs of €80,000 or more. Those subject to the full restriction, at adjusted incomes of €400,000 or greater, pay an effective income tax rate of 30% in addition to PRSI and Universal Social Charge. The list of specified reliefs that are subject to the restriction are set out in Schedule 25B of the Taxes Consolidation Act 1997. Broadly, the reliefs restricted are the various property based tax incentives and certain other reliefs such as the Business Expansion Scheme, film relief and donations relief. Also restricted are certain tax exemptions including artistic income and patent royalties. The normal deductible items available to the broad range of taxpayers such as medical expenses, trade union subscriptions, the personal tax credits and exemptions such as that for child benefit are not restricted. Similarly, normal business expenses and deductions for capital allowances on plant and machinery, as well as genuine business related trading losses are not restricted.

When the amended restriction was announced in Budget 2010, it was estimated that the changes would yield approximately €55 million in addition to the existing yield of €40 million.

It is worth pointing out that taxpayers who only claim personal tax credits, pay an effective rate of income tax of around 30% where their annual incomes exceed €125,000 approximately.

John Lyons (Dublin North West, Labour)
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Question 132: To ask the Minister for Finance his plans to abolish tax shelters that primarily benefit very high earners; and if he will make a statement on the matter. [22397/11]

Michael Noonan (Limerick City, Fine Gael)
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In the Programme for Government we have committed to reducing, capping or abolishing property tax reliefs and other tax shelters which benefit very high income earners. I would point out to the Deputy that the existing restriction of reliefs or horizontal measure is activated where individuals have an adjusted income of €125,000 and claim specified reliefs of €80,000 or more. Those subject to the full restriction, at adjusted incomes of €400,000 or greater, are required to pay an effective income tax rate of 30% in addition to PRSI and levies.

The list of specified reliefs that are subject to the restriction are set out in Schedule 25B of the Taxes Consolidation Act 1997. Broadly, the reliefs restricted are the various property-based tax incentives and certain other reliefs such as the Business Expansion Scheme, film relief and donations relief. Also restricted are certain tax exemptions including artistic income and patent royalties. The normal deductible items available to the broad range of taxpayers such as medical expenses, trade union subscriptions, the personal tax credits and exemptions such as that for child benefit are not restricted. Similarly, normal business expenses and deductions for capital allowances on plant and machinery, as well as genuine business related trading losses are not restricted.

Specifically in relation to property tax reliefs, an assessment process has been commenced to consider the possible impacts of reducing, capping or abolishing the "legacy" property-based tax reliefs. The impact assessment will consider the economic impact of curtailing the costs to the State of outstanding or 'legacy' reliefs, which have so far not been fully claimed by investors.

Our objective in conducting the assessment, which includes a public consultation, is to gain a better understanding of the benefits that may accrue to the Exchequer in terms of additional tax yield as well as consequences for investor groups and the wider economy arising from possible changes to the treatment of these reliefs. The results of this assessment will inform the budgetary process.