Sir, – Taoiseach Leo Varadkar has promised tax cuts, pension rises and public sector pay increases ahead of the next general election (News, December 30th). He said that the Fine Gael election manifesto would involve reducing the number of people paying the highest rate of tax, presumably by widening the tax bands.
However, the Irish top income tax rate, at 41 per cent , is not out of line with international norms. The really extraordinary feature of the Irish tax code is that earners on below the average wage pay the top rate of tax, the same rate as millionaires. The solution to this is obvious; create a third, higher tax rate for higher earners which would much more accurately reflect the spread of income in society.
Leo Varadkar is of course fully aware of this; he is on record as admiring the French system which has two more tax bands than ours. However, our current system protects the rich from tax rises as increases on their tax rate would also increase the burden on workers below the average wage. Is this why Fine Gael will not consider a third, higher rate of tax? – Yours, etc,
DONAL McGRATH,
Greystones, Co Wicklow.