Michael McGrath (Cork South Central, Fianna Fail)
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The position is that at present Ireland’s top marginal rate of tax is 52 per cent for employees and 55 per cent for self-employed. Therefore, to impose an additional 3 per cent tax on incomes above €140,000 per annum would have the effect of further increasing the top marginal tax rates to 55 per cent for employees and 58 per cent for the self-employed.

It is important to point out that high marginal tax rates can create a strong disincentive to work and could also cause harm to our international competitiveness and make Ireland a less attractive place for investment. Multinational enterprises support our economy with high value jobs, and provide substantial revenues across all taxes, including income tax, which are critical to the provision of public services. As the Deputy will be aware, considerable progress has been made in recent years to restore our economy, and this cannot be taken for granted, particularly given the challenges in the international arena that confront us at present.

Ireland has one of the most progressive personal income tax systems in the developed world. A progressive tax system ensures that the burden of taxation falls most heavily on those with a higher ability to pay. For example, in 2024, it is estimated that the top ten per cent of income earners will contribute around 63 per cent of the total income tax and USC collected this year. While, the bottom 80 per cent of income earners will pay only 21 per cent of the total income tax and USC collected in 2024.

Furthermore, a progressive personal income tax system, also plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI.

Finally, it is my view that a broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the fairest and sustainable income tax system in the long term.