Tuesday, 11 November 2014

Questions (202, 203, 204, 205)

Pearse Doherty

Question:

202. Deputy Pearse Doherty asked the Minister for Finance the cost of the change announced in budget 2015 of the reduction in the 41% rate of income tax to 40% and the decrease in the threshold at which the higher rate of tax is paid. [43032/14]

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Pearse Doherty

Question:

203. Deputy Pearse Doherty asked the Minister for Finance the cost of the decrease in €1,000 in the threshold at which the higher rate of tax is paid if the income tax rates remained unchanged in budget 2015. [43033/14]

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Pearse Doherty

Question:

204. Deputy Pearse Doherty asked the Minister for Finance the cost of the decrease in the top rate of income tax in budget 2015 if the threshold remained the same. [43034/14]

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Pearse Doherty

Question:

205. Deputy Pearse Doherty asked the Minister for Finance the cost of or the revenue raised by each of the individual changes to the USC rate in budget 2105, that is the cost of each of the following measures, charging USC on income from €0 to €12,012 @ 1.5%, charging USC on income from €12,013 to €17,576 @ 3.5%, charging USC on income from €17,577 to €70,044 @ 7%, charging USC on income from €70,044 to €100,000 @ 8%, charging USC on PAYE income in excess of €100,000 @ 8%, charging USC on self-employed income in excess of €100,000 @ 11%, charging USC for medical card holders whose aggregate income does not exceed €60,000 at a maximum rate of 3.5% and charging USC for individuals aged 70 years and over whose aggregate income is €60,000 at a maximum rate of 3.5% USC. [43035/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 202 to 205, inclusive, together.

I am advised by the Revenue Commissioners that Budget costs are estimated as a package of combined measures. The sum of the costs when the measures are separately estimated will not exactly equal the total cost of the package taken together. Given interactions between tax rates and bands, the sum of the costs of reducing tax band and rates will be lower when taken together than if each were costed individually.

I am informed by the Revenue Commissioners that the first and full year estimated cost of the reduction to the 41% tax rate to 40% and the €1,000 increase in the standard rate band is €292 million and €405 million respectively.

The first and full year estimated cost of increasing the standard rate band by €1,000 without changing the higher rate of income tax is €134 million and €180 million respectively.

The first and full year estimated cost of decreasing the 41% tax rate to 40% without changing the standard rate band is €164 million and €234 million.

The first and full year estimated cost of reducing the 2% and 4% USC rates to 1.5% and 3.5% respectively and adjusting the USC threshold from €10,036 to €12,012 is €239 million and €325 million respectively.

The first and full year estimated yield from introducing an 8% rate of Universal Social Charge applicable to incomes over €70,044 is €52 million and €71 million respectively.

The first and full year estimated yield from the increase to 11% of the Universal Social Charge surcharge applicable to self-employed incomes over €100,000 is €18 million and €42 million respectively.

The first and full year estimated cost of reducing the maximum rate of USC from 4% to 3.5% for medical card holders and over 70s with aggregate income less than €60,000 is €16 million and €22 million respectively.

These figures are estimated by reference to 2015 incomes, from the Revenue tax forecasting model using latest actual data for the year 2012, 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 who have been deemed to have elected for joint assessments are counted as one tax unit.