Section 9 deals with the special assignee relief programme, SARP, an income tax relief for some of the highest earners in the State. It is a relief on salaries between €75,000 and €1 million. We know for a fact that some of those who benefit from the scheme have salaries of over €3 million. I recognise that they only get the special tax relief on that part of their salary between €75,000 and €1 million. However, we have to look to the conversation which many people across the world are having around the pooling of extremely high levels of income equality at the very top. We are not talking about people who have two families or who are on €100,000. We are talking about people on salaries of between €1 million and €3 million. When 50% of people in the country earn incomes well under €30,000, how can we justify massive amounts of tax relief for those at the top?
There has been a conversation globally as to whether we need a higher level of tax or a third band. The conversation from the Government is always that we are focusing too much on these higher earners and we cannot look at a wealth or a higher band of tax. People are not aware that it is not simply that we are not putting an extra level of tax on the very highest earners in the State but we are actually giving them tax relief. This means that somebody earning between €40,000 and €60,000 will pay a higher portion of their wages in tax than somebody on €600,000. This is simply not acceptable.
The defence given is that this is basically to attract jobs to Ireland. The fact is that those who are in a position to create jobs and are high earners are provisionally already benefiting from our corporate tax rate, which has continued support across the field. We have corporate tax rates to attract corporations. Tax reliefs like the knowledge box need to be reviewed to ensure they are more efficient and effective. For example, if we are giving major international corporations tax reliefs, surely, we should not also be giving tax reliefs to every one of their executives. The public would be shocked and appalled if they realised how this was going.
I have an example of one individual who would pay €111,000 less in tax next year than a PAYE worker who was earning the same salary. That is some PAYE worker. However, there is a real issue of equity involved.
IMF research over 30 years in over 100 countries has consistently shown that when one increases the incomes of the top 10%, national GDP falls. When one increases the incomes of the bottom 10% in society, however, then the economy does better. That same IMF report states the trickle-down effect does not work.
I hope the Minister of State will reconsider section 9. If not, will he clarify what evidence there is for a job dividend from each person who is benefiting from the scheme and how we can be sure that?
