Michael Noonan (Limerick City, Fine Gael)
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The distributional analysis requested by the Deputy is set out in the following table.

Single Person, private sector employee taxed under PAYE. Full rate PRSI contributor

	Income Tax		USC		PRSI		Net Income		Difference
Gross Income	Current (2015)	Proposed	Current	Proposed	Current	Proposed	Current	Proposed
	€	€	€	€	€	€	€	€	€
20,000	700	1,400	545	0	800	800	17,955	17,800	-155
30,000	2,700	4,200	1,245	0	1,200	1,200	24,855	24,600	-255
35,000	3,940	5,600	1,595	0	1,400	1,400	28,065	28,000	-65
45,000	7,940	8,400	2,295	0	1,800	1,800	32,965	34,800	1,835
55,000	11,940	12,200	2,995	0	2,200	2,200	37,865	40,600	2,735
70,000	17,940	19,400	4,045	0	2,800	2,800	45,215	47,800	2,585
75,000	19,940	21,800	4,444	0	3,000	3,000	47,616	50,200	2,584
100,000	29,940	33,800	6,444	0	4,000	4,000	59,616	62,200	2,584
150,000	49,940	57,800	10,444	0	6,000	6,000	83,616	86,200	2,584

As can be readily seen from the table, if implemented, the proposal would have a negative effect on those earning €35,000 or lessaround 60% of all income earners. The table illustrates the effect of the proposal in the case of a single individual assessed under the PAYE system. As it is assumed in costing the proposal that all current tax credits and allowances are abolished, this effect would be amplified and extended in the case of married one earner couples. Furthermore, the very large benefits accruing to the better off under this proposal would undermine the progressivity that is inherent in the current income tax system.

As the Deputy will be aware, the Government is committed to reducing the marginal tax rate on low and middle-income earners, over a series of budgets, in a manner that maintains the highly progressive nature of the Irish tax system.