Wednesday, 3 July 2013

Questions (74)

Pearse Doherty

Question:

74. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised if personal and not employee tax credits for high income earners were phased out with a reduction of half the credits between €100,000 and €150,000, three quarters of the credits between €150,000 and €200,000, and abolished over €200,000; the impact that would have on the average tax take from salary earners in that category; and the impact that would have on income earners in those categories if they were also subject to a new third rate of tax of 48% on income earned over €100,000. [32383/13]

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Written answers (Question to Finance)

I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of reducing the main personal income tax credits, but not the employee tax credit, for all income earners in the manner mentioned by the Deputy, would be of the order of €204 million. A breakdown of the estimated Exchequer yield by each specified income range, together with an indication of the average additional tax payable by income earners within each income range, is as follows.

Range of Gross Income

Estimated yield

to the Exchequer

€m

Average additional

tax payable per

income earner within

the gross income range

€100,000 to € 150,000

101

€ 1,540

€ 150,001 to € 200,000

41

€ 2,305

Over € 200,000

62

€ 3,079

If the impact of a new third tax rate of 48% on taxable income over €100,000 is included with the reductions in tax credits already mentioned above, the corresponding average additional tax payable by income earners within each income range, is as follows.

Range of Gross Income

Average additional

tax take per income

earner within the

gross income range

€100,000 to € 150,000

€ 1,954

€ 150,001 to € 200,000

€ 4,757

Over € 200,000

€ 17,668

It should be noted that the income ranges shown in the above table relate to Gross Income as defined in Revenue Statistical Report 2011. These figures are estimates from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. They are therefore provisional and likely to be revised. It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.