I propose to take Questions Nos. 208, 236 and 238 together.
It is assumed that the threshold for the 48% Income Tax rate proposed by the Deputy, would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents, married couples and civil partnerships.
I am advised by the Revenue Commissioners that, given the current band structures, major issues would need to be resolved as to how, in practice, such a new Income Tax rate could be integrated into the current system and how this would affect the relative position of different types of income earners.
Notwithstanding these issues, the Revenue Commissioners estimate that the first and full year yield to the Exchequer of the introduction of the suggested new third rate of Income Tax of 48% would be of the order of €222 million and €380 million respectively.
The Revenue Commissioners further estimate the partial and full year costs to the Exchequer of increasing the existing exemption threshold of €10,036 for the Universal Social Charge (USC) to €17,542 would be €502 million and €689 million respectively.
The Revenue Commissioners tentatively estimate the first and full year cost of retaining the exemption from the 7% rate of Universal Social Charge (USC) for those on medical cards with an aggregate annual income below €60,000 to be of the order of €77 million and €102 million respectively. They also estimate that the first and full year yield from retaining the 10% rate of USC, which is currently applicable to self-employed income in excess of €100,000, estimated by reference to 2014 incomes, would be of the order of €50 million and €123 million respectively (this is the additional yield compared to the case where only the 7% rate applied to self-employed income in excess of €100,000).
These figures are estimates for 2014 from the Revenue tax forecasting model using latest actual data (for the year 2011), 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 have been deemed to have elected for joint assessment are counted as one tax unit. While not directly available from tax records, recent data exchanges between Revenue and the HSE mean medical card holders can be identified and linked to Revenue's taxpayer records. As a result, it is estimated that 20% of earners with USC liable income between €16,016 and €60,000 hold a medical card and this is the basis for the relevant costing above.
