High-income earners who are paid more than €200,000 a year should pay a minimum 20 per cent tax, the Progressive Democrats leader and Tánaiste, Ms Mary Harney, has declared. Mark Hennessy, Political Correspondent, reports.
"I have been unhappy for some time with the situation where some people pay no tax at all," she said yesterday, echoing comments made earlier by the Taoiseach, Mr Ahern.
Since Budget day the Government has made great play of the fact that it intends to close a number of tax relief schemes in next year's Budget, following a review due to take place over the next 12 months.
In Tallaght yesterday Ms Harney went further than Mr Ahern, however, by laying down expectations for those earning more than €200,000 annually.
"I believe that somebody should at a very minimum, if they are earning a couple of hundred thousand a year, pay up to 20 per cent in tax. At a very minimum.
"I don't believe that somebody should be able to write off 100 per cent of their income at that level by way of using reliefs," she declared.
The Minister for Finance, Mr Cowen, intends to follow through on the promise of his predecessor, Mr Charlie McCreevy, to curb property tax relief schemes next year.
However, Mr Cowen has already supported the Department of Finance's objections to a minimum tax rate, on the grounds that it will encourage people to reduce their liability, although it is not clear if this is what the Tánaiste now wants.
In her comments, Ms Harney said: "I am strongly in favour of low taxes, but I do not support a regime where very wealthy individuals pay nothing and make no contribution to the provision of public services in this State."
She warned, however, that tax relief schemes would have to be reviewed carefully. "We can't throw the baby out with the bathwater," she said.
Inner-city rejuvenation schemes, film production schemes and others had been done "for very good social reasons", said the Tánaiste. But it had never been the intention to reduce some wealthy people's tax liability to zero.
"It is not right. It is not fair and it is not going to continue," she said.
"But it is a question of the way that we do it. We want to keep the schemes but we want to restrict the capacity of somebody to be able to use them to write off all their income."
Besides property schemes, the Minister for Finance could look at the exemptions enjoyed by stallion-owners, artists and writers.
He could also examine a number of firms based in the Shannon Free Zone that earn millions in intellectual property payments annually.