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Gnáthamharc

Tax Yield.

Dáil Éireann Debate, Tuesday - 23 March 2010

Tuesday, 23 March 2010

Ceisteanna (88)

Leo Varadkar

Ceist:

193 Deputy Leo Varadkar asked the Minister for Finance the estimated yield from increasing the marginal tax rate for income earned in excess of €150,000 from 50% to 65%; and if he will make a statement on the matter. [12347/10]

Amharc ar fhreagra

Freagraí scríofa

It is assumed that the change mentioned in the question is an effective increase in the top rate of income tax by 15 percentage points from 41% to 56% for incomes in excess of €150,000. It is also assumed that the threshold for the proposed new tax band mentioned by the Deputy would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents and married couples. I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2010 incomes, of the introduction of a new 56% rate in the manner described would be of the order of €558 million.

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.

This figure is an estimate from the Revenue tax-forecasting model using actual data for the year 2007, adjusted as necessary for income and employment trends for the year 2010. It is therefore provisional and likely to be revised.

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