I move amendment No. 1:
In page 11, to delete lines 8 to 11, and substitute the following:
"TABLE
PART I
Part of taxable income |
Rate of tax |
Description of rate |
(1) |
(2) |
(3) |
The first £6,100 |
31 per cent. |
the standard rate |
The next £3,100 |
47 per cent. |
|
The remainder |
55 per cent. |
the higher rates |
PART II
Part of taxable income |
Rate of tax |
Description of rate |
(1) |
(2) |
(3) |
The first £12,200 |
31 per cent. |
the standard rate |
The next £6,200 |
47 per cent. |
|
The remainder |
55 per cent. |
the higher rates |
".
There is a fair amount of business to be dispatched before the time limit is reached so I will not spend too much time on this amendment. In the course of his Second Stage speech on the Finance Bill, the Minister for Finance referred to the "phased programme of tax reform now underway at the behest of this Government." It struck me that he must have meant something by "a phased programme of tax reform", that there must be some elements in this reform which even in a very indefinite way have crystalised in the Minister's mind. The Minister on a number of occasions, and also the Taoiseach, have referred to the need to bring down taxes. I do not believe that a downward direction amounts to a "phased programme of reform." I thought it proper therefore to put down an amendment on Report Stage dealing with the question of tax rates, in order to give the Minister an opportunity to expand further on his own phased programme of tax reform and to see whether such a phased programme of tax reform does exist or whether phased means "fazed" rather than "phased", which I believe may be the case in this instance.
If the Minister has programme of tax reform, I believe he is under a duty to spell out to the Irish people not only the direction but the ultimate aims he has in the proximate and foreseeable future. I believe the Minister owes a duty to the taxpayer and to the unemployed to indicate in general form the overall aims and shape of the tax system he wants to build, and to give some indication of the changes he wants to make — the widening or narrowing of the tax base that he has in mind as part of this phased programme of reform. I think he owes it to the people of this country, both employed and unemployed, to tell them where the Government plan to bring our system of taxation and the marginal rates over a period of years and what they see as the appropriate top rate of income tax, how many bands they consider appropriate — at present we have three — and how they see the tax system interacting with the PRSI system. The Minister should say whether he is happy with the interaction of those two systems at present and whether it is just that PRSI is charged on all income, no matter how low, whereas taxation is not. For instance, in the English system lower incomes are exempted from the payment of social insurance and the levels of income at which workers become liable to pay such amounts are graduated. Does the Minister think that is appropriate to our case? In view of the fact that the Minister has again lifted the upper ceiling of PRSI in the Social Welfare Bill, which is part of the budgetary strategy, would he indicate whether the employer's contribution is whether the employer's contribution is to become unlimited? If the Minister seriously contends that the words used in the Second Stage debate, that the Government had a phased programme of tax reform, mean anything real and were meant to be other than a smoke screen or a bit of palaver to keep people happy or to give the whiff of tax reform without any substance, it is time for him to spell out in a general form what process of tax reform he has in mind for the next couple of years.
The amendment in my name seeks to elicit such information by way of suggesting that there should be a 1 per cent further reduction in each of the marginal rates of tax in the next year, both for married and single people. The purpose of so suggesting is not that I believe that this is the appropriate way to set about reforming the tax system, because I do not. I have spoken in this House on numerous occasions — probably too often — on the need for other more dramatic and radical reforms, including the introduction of tax credits in place of tax allowances. The amendment seeks to elicit from the Minister why he is going this far this year, where he intends bringing tax rates next year and his priorities for tax reductions, if that is his overall aim.
Before the words trip off the Minister's well prepared tongue, as doubtless they will, that my proposal would cost the Exchequer £70 million or £80 million or X hundred million pounds — I am sure the little machine which spits out these goodies has been working overtime in Merrion Street — and therefore to make a proposal in these circumstances is irresponsible, I can hear it all now, it has been word processed before and doubtless it will be said again, I want to say for the record of this House that someone in my position dealing with proposals to reform the tax system in the context of a Finance Bill is hemmed in, as you know well, a Leas-Cheann Comhairle, by the rules of this House. One of the most extraordinary rules of this House is that I can never suggest any bad news. I am confined to suggesting good news by ways of amendments.
The galling thing about this is that when one does suggest some good news one is accused of statutory irresponsibility by the Minister in the script supplied to him by his advisers. The sad fact is that one cannot win. One cannot propose any change in the tax system which would cost anything or any widening of the tax base or anything which would adversely affect any person in the community at large. Before I get the predictable reply I ask the Minister to avail of this opportunity to inform the House what he meant when he used the phrase "a phased programme of tax reform" in his Second Stage speech and to indicate to the House and the public, both working and non-working, what plans he has in the future to further reduce tax rates in the direction specified in the table which forms part of the amendment in my name.