Dáil Éireann Debate, Thursday - 14 October 2004
4 Mr. P. McGrath asked the Minister for Finance the cost of extending the standard rate cut off point in order that the 632,000 taxpayers estimated to have paid at the top rate in 2004 be reduced to 400,000 in 2005. [24852/04]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the cost of achieving a position where it is estimated that no more than 400,000 income earners will pay tax at the top rate in 2005 is approximately €1.3 billion in a full year.
The Minister is quoting statistics but he neglects to mention the important ones. Someone on 90% of the minimum wage still pays tax. That was not the situation in 1997 for people on the minimum wage.
There was no minimum wage in 1997.
There was no minimum wage but there was a comparable wage. The Minister also neglected to say that 407,000 paid tax at the top rate in 1997 while 630,000 now pay tax at the top rate. That is despite that in 2001, the previous Minister announced in his Budget Statement that he was removing 107,000 from the top rate of tax. In 2002 he announced that he was removing 57,000 from the higher rate. How does the Minister reconcile the fact that the former Minister gave those statistics when we know that year on year, the numbers paying tax at the higher rate have risen dramatically to the extent that now 53% of taxpayers pay at the higher rate? There are some not paying tax, about the same percentage as paying tax at the higher rate, but many of those are in part-time jobs working just a few hours a week.
A problem in dealing with statistics is that if we compare apples and oranges, we end up with a mess.
That is what the Minister is doing.
The Deputy is talking about the top rate. The top rate in 1997 was totally different from the top rate in 2004.
Many more people pay at the top rate today.
The top rate of tax is paid by 50% more people.
Is it the contention of the Opposition that we go back to the 48% rate and make 450,000 people pay that? Where is the Deputy coming from? He should get his act together. There is a different tax rate, the average industrial wage has risen by €10,000 and 240,000 people who used to pay tax do not pay tax at all.
That is not true. It is an incorrect conclusion.
There were 380,000 people in this State who did not pay tax when we entered office and 620,000 do not pay tax now, but I am being told that on the basis of those two statements, I cannot draw the conclusion that 240,000 more people do not pay tax now than in 1997.
That was not what the Minister said.
The Deputy must allow the Minister to finish.
How can the Minister say that 240,000 who paid tax do not pay tax now? That is exactly what he said. An extra 600,000 people are working.
At least the Deputy acknowledges that.
Of the 600,000 who are working, 240,000 do not pay tax but a further 240,000 pay tax at the top rate. The Minister cannot conclude that they do not pay tax. How does he reconcile that with what the previous Minister said each year that he was taking an increasing number of people from the higher rate when the reality shows that the numbers paying tax at the higher rate have been steadily increasing? The Minister is not too good at answering that question.
The questions are not too good either. More pay tax at 42% than paid tax at 48%.
An additional 55%.
There are 600,000 more people working and 240,000 more who do not pay tax than was the case in 1997. The figure has gone from 380,000 to 620,000. When more people are working and tax rates are reduced, it moves differently from before. The Deputy suggests that we are in a worse position now because 240,000 more do not pay tax and 600,000 more are working, and complains that 200,000 more pay tax at 42% instead of at 48%. I remind the Deputy that it is a function of higher earnings and more people working. Perhaps the Deputy's solution is to have nobody working, nobody paying tax and we will all be in Nirvana. Is that the logic of the Deputy's position? He is not prepared to acknowledge that is the function of a growing labour force, earning more wages, in the context of lower tax rates, a tax credit that helps the lower paid more than under the old allowance system which differentiated in favour of those on the higher rates——
The Minister is talking rubbish now.
——and with 240,000 fewer workers.
The time for the question is concluded.
We are in a better position than in the past.
Ceann Comhairle, you are not sharing the time equally.
Sorry, Deputy, so long as Deputies continue to ask questions——
It allows for time to be shared equally.
It does not, Deputy.
It should be shared into times of two minutes for each reply and one minute for each answer.
No. Deputy, that is not correct. The Minister has two minutes to answer a priority question. There is no time limit on the supplementary questions. The time limit does not apply on supplementaries until we move onto other questions. If the Deputies wish to change, they know the way to do it but the Chair will implement Standing Orders as laid down by the Members of this House. There is no time limit on supplementary questions in priority questions.
