I assume the Deputy is seeking the number of higher rate taxpayers as a percentage of all income earners on the tax record. I am advised by the Revenue Commissioners that the information requested, which I will outline, is rounded to the nearest thousand. In 1999-2000, there were 543,000 higher rate taxpayers, comprising 32.6% of the total number of income earners. In 2000-01, there were 540,000 higher rate taxpayers, comprising 30.6% of the total number of income earners. In 2001, the short tax year, there were 516,000 higher rate taxpayers, comprising 28.3% of the total number of income earners. In 2002, there were 517,000 higher rate taxpayers, comprising 27.9% of the total number of income earners. In 2003, there were 570,000 higher rate taxpayers, comprising 30.5% of the total number of income earners. In 2004, it is estimated that there will be 632,000 higher rate taxpayers, comprising 33.4% of the total number of income earners. It should be noted that a married couple jointly assessed is counted as one tax unit.
The number of people exempt from tax increased from 459,000 to 669,000, or from 27.5% to 35.3% of income earners, between 1999 and 2003. Relating the numbers in each group to income earners gives a more balanced and meaningful figure as it takes account of all those on the tax file and makes clear that assessing the proportion of income earners on the higher rate must take account of the policy goal of increasing the numbers on low pay exempt from tax.
Additional information not given on the floor of the House.What matters to people is the net effect of tax changes on their take-home pay. Everybody in the PAYE sector will see their take-home pay rise as a result of this budget. Under the system of tax credits, the only way to move people off the top rate of tax is to widen the bands. Indexation in line with the CPI, which some people had called for in advance of the budget, would have delivered some widening. However, most categories of PAYE taxpayer have benefited to a greater extent than would have been the case had bands and credits been indexed by the expected rise in inflation for 2004 over 2003. Indexation of all bands and credits would have cost €214 million in a full year. The full year cost of the budget income tax package is €287 million, which is €73 million more than €214 million. The budget package delivers further progress on the key Government priority of moving towards exempting the minimum wage from taxation and focuses resources on those at the lower end of the income scale.