Sir, – The Government is considering cutting the top rate of income tax, which is 52 per cent for most workers. Top marginal tax rates of around 50 per cent are common across Europe. Where Ireland is unusual is the particularly low point at which workers begin to pay the top rate, currently €32,800 for single people. This is below average earnings. Most people agree that this is both unfair and it discourages work effort. It leads to the perception that Ireland is a high-tax country, even though overall taxes are below the European average.
Ireland has a very progressive income tax system, and the top 5 per cent of earners pay about 40 per cent of income tax.
This is unsurprising, as income inequality is wide, and high earners receive a disproportionate share of the income. Faced with continued budget deficits, now is not the time to deliver scarce resources to this group. Rather than cut the top rate, an alternative is to introduce a third, or fourth tax rate. A possible rate schedule might be 20 per cent, 30 per cent, 40 per cent and 50 per cent. This would make the income tax system smoother, and ensure that workers don’t pay 50 per cent marginal tax rates until they earn, say, €100,000.
By adjusting tax bands and tax credits, marginal tax rates for many workers could be reduced, while maintaining income tax revenues. – Yours, etc,
STEPHEN McNENA,
Lough Gill, Sligo.
Sir, – With a recent Dóchas (Ipsos/MRBI) poll again showing that a large majority of our citizens support overseas aid and international development, I would encourage the Government to respect that support. Another cut in this year’s budget would be a further blow after six years of cuts. In an increasingly globalised world, our future also depends on the stability of the wider world. Increasing our overseas aid budget is not just the right thing to do, but in the most selfish way it is the smart thing to do. The Ebola crisis shows exactly what can happen if problems are neglected by the wider world. In short, a safer, healthier and more prosperous world is better for all of us. With this in mind I hope the Government increases our overseas aid budget this year, for our good and for the good of others. – Yours, etc,
ROSS McCARTHY,
Freetown,
Sierra Leone.
Sir, – Ireland has a great record in contributing to those in need , and we should endeavour to do our best in this regard. However, will the Department of Foreign Affairs reconsider its allocation of aid to India (€2.8 million in 2013) in light of India’s recent entry to the space race with its Mars orbital mission, its being a member of the G20, its economy being ranked 10th in the world by way of GDP, and its status as a nuclear power? – Yours, etc,
D O’SHEA,
Grange,
Cork.