FINANCE MINISTER MICHAEL Noonan has insisted that there is no hidden source of funds that the government can tap through new taxation measures such as a third rate of tax.
He was speaking to the Oireachtas sub-committee on finance yesterday during the committee stage of the Finance Bill when he insisted that Ireland has one of the most progressive taxation systems in Europe.
He said there was “no money tree out in the back garden” and “no magic beans” that the government could tap for money that could go towards closing the deficit.
“When I say money tree or magic beans what I’m really saying is that there isn’t any unidentified source that will yield an awful lot of tax in our country,” Noonan said, adding: “It’s not there, there isn’t this hidden source of tax.”
Sinn Féin’s finance spokesperson Pearse Doherty told the Minister that a third rate of tax at 48 per cent would yield €365 million but Noonan claimed that this rate would increase the top rate of tax by 7 percentage points.
He claimed that the effective tax rate would be 59 per cent for employees and 62 per cent for the self-employed as a result of such an increase.
Noonan said that such levels of taxation would be “counter-productive” and would “cause people to do different things with their money, move out of the country, certainly it would be a tax on jobs”.
The Minister agreed with the general principle that those who are better off should pay more but claimed that European Commission research had shown that Ireland had one of the most progressive tax systems of six countries it examined.
“That’s the facts of the situation,” he said adding that Ireland’s system of taxation was “extraordinarily progressive and we can move much further in that direction.”