Tuesday, 21 May 2019

Ceisteanna (137, 138, 139, 140, 141, 142, 143, 144, 145)

Pearse Doherty

Ceist:

137. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering the personal, PAYE and earned income credits by 1.43% per €1,000 on an individual income between €100,000 and €170,000 per year, resulting in no entitlement to these tax credits when income is in excess of €170,000, based on the latest individualised income figures available to the Revenue Commissioners. [21398/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

138. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000, based on the latest individualised income figures available to the Revenue Commissioners. [21399/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

139. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2% per €1,000 on individual income between €100,000 and €150,000 per year, resulting in no entitlement to these tax credits when income is in excess of €150,000, based on the latest individualised income figures available to the Revenue Commissioners. [21400/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

140. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 5% per €1,000 on individual income between €100,000 and €120,000 per year, resulting in no entitlement to these tax credits when income is in excess of €120,000, based on the latest individualised income figures available to the Revenue Commissioners. [21401/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

141. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 5% per €1,000 on individual income between €100,000 and €120,000 per year resulting in no entitlement to these tax credits when income is in excess of €120,000 in addition to a USC rate of 2%, 3%, 4%, 5%, 6% and 7%, respectively, in excess of €120,000, based on the latest individualised income figures available to the Revenue Commissioners. [21402/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

142. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000 in addition to a USC rate of 2%, 3%, 4%, 5%, 6% and 7%, respectively, in excess of €140,000, based on the latest individualised income figures available to the Revenue Commissioners. [21403/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

143. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE and earned income credit by 2% per €1,000 on individual income between €100,000 and €150,000 per year resulting in no entitlement to these tax credits when income is in excess of €150,000 in addition to a USC rate of 2%, 3%, 4%, 5%, 6% and 7%, respectively, in excess of €150,000, based on the latest individualised income figures available to the Revenue Commissioners. [21404/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

144. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue from tapering out the personal, PAYE credit and earned income credit from income in excess of €80,000, a reduced credit by 5% per €1,000 for gross income between €80,000 and €100,000 and a 0% credit on gross income in excess of €100,000, based on the latest individualised income figures available to the Revenue Commissioners. [21405/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

145. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised through introducing a third rate of income tax (details supplied) on all income over €100,000, based on the latest individualised income figures available to the Revenue Commissioners. [21406/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 137 to 145, inclusive, together.

I refer the Deputy to the Income Tax Reform Plan which was published by my Department in 2016 and which discussed tapering of tax credits. As this report made clear, there are a number of technical issues and policy issues which would need to be addressed in order to achieve a tapered withdrawal of income tax credits, particularly for PAYE employees. I would also note in particular the negative impact it could have on the marginal rates of tax, an important benchmark for the competitiveness of the income tax system overall.

I have been advised by Revenue that the estimated yields requested are as follows.

Regarding Question 21398/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 1.43% per €1,000 on individual income between €100,000 and €170,000 per year, resulting in no entitlement to these tax credits when income is greater than €170,000, is estimated to be of the order of €150m and €180m for first and full year respectively.

Regarding Question 21399/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is greater than €140,000, is estimated to be of the order of €185m and €220m for the first year and for a full year respectively.

Regarding Question 21400/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 2% per €1,000 on individual income between €100,000 and €150,000 per year, resulting in no entitlement to these tax credits when income is in excess of €150,000, is estimated to be of the order of €170m and €205m for the first year and for a full year respectively.

Regarding Question 21401/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 5% per €1,000 on individual income between €100,000 and €120,000 per year, resulting in no entitlement to these tax credits when income is in excess of €120,000, is estimated to be of the order of €220m and €265m for the first year and for a full year respectively.

Regarding Question 21402/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 5% per €1,000 on individual income between €100,000 and €120,000 per year, resulting in no entitlement to these tax credits when income is in excess of €120,000, coupled with an additional USC rate of 2, 3, 4, 5, 6 or 7% on income in excess of €120,000 is set out in the following table:

First Year €m

Full Year €m

Tapering & USC 2%

365

455

Tapering & USC 3%

440

555

Tapering & USC 4%

515

650

Tapering & USC 5%

590

745

Tapering & USC 6%

660

845

Tapering & USC 7%

735

940

Regarding Question 21403/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000, coupled with additional USC rates of 2, 3, 4, 5, 6 or 7%, on incomes in excess of €140,000 is set out in the following table.

First Year €m

Full Year €m

Tapering & USC 2%

310

390

Tapering & USC 3%

370

470

Tapering & USC 4%

435

555

Tapering & USC 5%

495

635

Tapering & USC 6%

560

720

Tapering & USC 7%

620

800

Regarding Question 21404/19, the estimated yield from tapering out the personal, PAYE and Earned Income credits by 2% per €1,000 on individual incomes between €100,000 and €150,000 per year, resulting in no entitlement to these tax credits when income is in excess of €150,000, coupled with an additional USC rate of 2, 3, 4, 5, 6 or 7%, on income in excess of €150,000 is set out in the following table:

First Year €m

Full Year €m

Tapering & USC 2%

290

360

Tapering & USC 3%

345

440

Tapering & USC 4%

405

515

Tapering & USC 5%

465

595

Tapering & USC 6%

520

670

Tapering & USC 7%

580

750

Regarding Question 21405/19, the estimated yield from tapering out the personal, PAYE, and Earned Income credits on incomes in excess of €80,000, a reduced credit by 5% per €1,000 for gross income between €80,000 and €100,000 and a 0% credit on gross income in excess of €100,000 is in the order of €355m and €419m for the first and full year respectively.

Regarding Question 21406/19, I am informed by Revenue that due to the way in which taxpayers are assessed, where the tax liability is calculated on the total income of the taxpayer unit, it is not possible to estimate the effect of applying an additional rate of taxation on individual incomes in excess of €100,000 in the manner outlined.

A number of important caveats apply to the above estimates which are provisional and may be revised, including that they assume no behavioural response on the part of taxpayers to the changes, if implemented. They therefore should be treated with caution.

Further, as the Deputy will already be aware, the estimates in relation to the tapering of credits are based on tax returns for 2016 following a bespoke exercise undertaken to break down the gross incomes of taxpayer units to an individualised level and a manual estimation process (outside of Revenue’s usual tax modelling software). As that exercise can only split gross incomes, this estimation process required a number of assumptions to be made in relation to the distribution of credits.

In relation to those questions which contain changes to the Universal Social Charge, these figures for the USC are from the Revenue micro-simulation model, Tax Modeller, and are estimates for 2019. Therefore the figures provided in these Questions are a mixture of 2019 estimates and 2016 estimates.

Finally it should be noted that, while these costings are provided where possible based on estimated individual incomes, the tax system and the Revenue IT infrastructure used to assess tax liabilities remain configured on a taxpayer unit basis. There would be significant development work (and associated cost and time) required to implement any changes to this basis. Were such a change implemented, it may lead to outcomes different to those modelled at present using the estimated data.