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IBEC urges cut in top tax rate


Nat O'Connor

Nat O'Connor

Nat O'Connor

HALF of all taxpayers would benefit from a cut in the top rate of income tax, employers body IBEC said.

It disputed recent findings by a left-leaning think tank which it said "were factually incorrect and technically flawed".

Think-tank Tasc said last week that cuts to the 52pc marginal rate would help only the top one-in-six earners.

The marginal tax rate includes the 41pc income tax rate, PRSI and the universal social charge, and is the tax paid on higher levels of pay.

Tasc research director Nat O'Connor said that the Government was being "misleading" by suggesting it would help low and middle-income families.

"Only 17pc of those paying income tax are paying at the higher rate. A cut to the 41pc tax rate really benefits those on the highest incomes. Even then, people who pay only a small share of their income at the higher rate will only see a small benefit," said Dr O'Connor.

Taoiseach Enda Kenny has promised a cut in the top 41pc income tax rate.

But IBEC has disputed the Tasc claim that only small numbers of higher-paid workers would benefit from a cut in the 41pc rate.

Chief economist and head of policy at IBEC Fergal O'Brien said that once part-time workers, pensioners and those who have just started their first job are excluded, half of all workers pay tax at the higher rate.

"Our analysis of the 2012 Revenue data shows that about half of Irish taxpayers pay tax at the marginal rate," he said.

Mr O'Brien said Ireland was not a low-tax country.

Some €3bn in personal income taxes was paid by workers here, compared with the equivalent in the EU.

The IBEC analysis found that middle and high earners pay the vast majority of taxes.

By contrast, lower earners less tax than the average in the western democracies.

Irish Independent