Dáil Éireann Debate, Tuesday - 24 June 2014
161. Deputy Thomas P. Broughan asked the Minister for Finance the amount of revenue that would be generated in each case if a third rate of income tax of 48%, 49% or 50% was applied to persons earning over €100,000 in budget 2015. [27301/14]
View answer165. Deputy Thomas P. Broughan asked the Minister for Finance the cost to the Exchequer of increasing the PAYE tax credit by €5 per week and €10 per week respectively. [27305/14]
View answerI propose to take Questions Nos. 161 and 165 together.
It is assumed that the threshold for the proposed new income tax rates mentioned by the Deputy in Question 27301/14 would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents, married couples and civil partnerships.
I am advised by the Revenue Commissioners that, given the current band structures, major issues would need to be resolved as to how in practice such a new rate could be integrated into the current system and how this would affect the relative position of different types of income earners. Notwithstanding these issues, I am advised by the Commissioners that the full year yield to the Exchequer, estimated by reference to 2014 incomes, of the introduction of the suggested new third rate of Income Tax of 48%, 49% or 50% would be of the order of €380 million, €435 million and €489 million respectively.
In relation to Question 27305/14, I am further advised by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of increasing the employee (PAYE) tax credit in the manner mentioned by the Deputy would be of the order of €332 million and €644 million respectively.
These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2011, adjusted as necessary for income self-employment and employment trends in the interim. They are provisional and may be revised. Married persons or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit.
