Ahern says next tax cuts to aid lowest earners

The Taoiseach told the Dáil today that any future tax reductions should focus on the less well off.

The Taoiseach told the Dáil today that any future tax reductions should focus on the less well off.

"There is no case for reductions at the top end. Obviously, the bands and allowances must be kept in line, as the Minister achieved in the last budget," Mr Ahern said.

"The reductions should help people who are working hard on incomes that are no longer low but which are relatively low compared to others.''

Mr Ahern said a number of initiatives introduced in recent budgets had reduced the tax burden of the lower-paid.

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"This has worked very successfully. The proportion of taxes of those on the average industrial wage, which is approximately 32,000 euros, has fallen dramatically from approximately 14 per cent eight years ago to approximately six per cent.

"This represents a considerable achievement in bringing about equity in the tax system, which means that the burden is now being shifted from those on the average industrial wage and the amount reduced considerably.''

The Labour Party leader Pat Rabbitte said he would happily support the Taosieach if he were to cut taxes for the lowest paid people, but that Mr Ahern's partners in Government, the Progressive Democrats had indicated a preference to reduce the tax burden on high earners.