Dáil Éireann Debate, Wednesday - 14 January 2015
128. Deputy Eoghan Murphy asked the Minister for Finance further to Parliamentary Question No. 65 of 11 December 2014 and incorporating the taxation model outlined in that question if he will provide comparisons of the tax liabilities for individual PAYE workers between the current system, as per budget 2015, and the proposed model, for the following incomes: €20,000, €30,000, €35,000, €45,000, €55,000, €70,000, €75,000, €100,000 and €150,000. [49451/14]
View answerThe distributional analysis requested by the Deputy is set out in the following table.
Single Person, private sector employee taxed under PAYE. Full rate PRSI contributor
|
|
Income Tax |
USC |
PRSI |
Net Income |
Difference |
||||
|
Gross Income |
Current (2015) |
Proposed |
Current |
Proposed |
Current |
Proposed |
Current |
Proposed |
|
|
|
€ |
€ |
€ |
€ |
€ |
€ |
€ |
€ |
€ |
|
20,000 |
700 |
1,400 |
545 |
0 |
800 |
800 |
17,955 |
17,800 |
-155 |
|
30,000 |
2,700 |
4,200 |
1,245 |
0 |
1,200 |
1,200 |
24,855 |
24,600 |
-255 |
|
35,000 |
3,940 |
5,600 |
1,595 |
0 |
1,400 |
1,400 |
28,065 |
28,000 |
-65 |
|
45,000 |
7,940 |
8,400 |
2,295 |
0 |
1,800 |
1,800 |
32,965 |
34,800 |
1,835 |
|
55,000 |
11,940 |
12,200 |
2,995 |
0 |
2,200 |
2,200 |
37,865 |
40,600 |
2,735 |
|
70,000 |
17,940 |
19,400 |
4,045 |
0 |
2,800 |
2,800 |
45,215 |
47,800 |
2,585 |
|
75,000 |
19,940 |
21,800 |
4,444 |
0 |
3,000 |
3,000 |
47,616 |
50,200 |
2,584 |
|
100,000 |
29,940 |
33,800 |
6,444 |
0 |
4,000 |
4,000 |
59,616 |
62,200 |
2,584 |
|
150,000 |
49,940 |
57,800 |
10,444 |
0 |
6,000 |
6,000 |
83,616 |
86,200 |
2,584 |
As can be readily seen from the table, if implemented, the proposal would have a negative effect on those earning €35,000 or less around 60% of all income earners. The table illustrates the effect of the proposal in the case of a single individual assessed under the PAYE system. As it is assumed in costing the proposal that all current tax credits and allowances are abolished, this effect would be amplified and extended in the case of married one earner couples. Furthermore, the very large benefits accruing to the better off under this proposal would undermine the progressivity that is inherent in the current income tax system.
As the Deputy will be aware, the Government is committed to reducing the marginal tax rate on low and middle-income earners, over a series of budgets, in a manner that maintains the highly progressive nature of the Irish tax system.
