It is assumed that the Deputy is referring to amending the tax regime for income earners to which the restriction of tax reliefs applies, i.e. those individuals that have an adjusted income of €125,000 or greater 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. On the basis of historical incomes and claims data available for 2009, the latest year for which the necessarily detailed information is available, it is tentatively estimated that the full year yield to the Exchequer from applying the measures mentioned in the question would be of the order of €120 million. The impact of the economic down turn on current personal incomes and potential claims for tax reliefs cannot be fully factored into the estimate of yield provided because the tax returns for 2010 and 2011 are not yet received. For this reason the figure of yield provided should be regarded as only indicative.
To impose the effective income tax rates suggested by the Deputy solely on those taxpayers that claim specified reliefs, would effectively penalise taxpayers for availing of those reliefs and incentives. Obviously this would make tax incentives redundant in terms of their potential for contributing to the achievement of the socio-economic objectives for which they were designed.
Taxpayers, who only claim personal tax credits, pay an effective rate of income tax of around 30% where their annual incomes are in the region of €125,000. To implement the rates suggested by the Deputy such that they would apply to all taxpayers, would involve the imposition of higher marginal rates of income tax and/or the reduction of the general tax credits available.