Doherty calls for reform of High Earners’ restriction as figure show 346 High Income Earners have built up €97.8m in tax reliefs that can be carried forward
Sinn Féin Finance Spokesperson Pearse Doherty TD has said figures obtained by him thorough the Budget Oversight Committee show that 346 High Income Earners have accumulated €97.8m in tax reliefs that can be carried forward to be offset against future tax liabilities.
Deputy Doherty said that the figures – the latest available, although they date from 2016 – show that reform is needed of the High Earners’ restriction.
The Donegal TD said:
“These figures are very alarming. The High Income Earners’ Restriction means anybody earning over €125,000 is subject to a regime that ultimately, as their earnings rise, restrict them to €80,000 in reliefs or 20% of their adjusted income in reliefs.
“That is a sensible policy given the ability of high income earners to minimise their tax liability, but the fact that they have built up so much ‘excess relief’ means in coming years there is a danger that they will still benefit.
“A restriction must restrict, not just delay, relief for high earners. Without reform, this small number of wealthy people has scope to write off €97.8m between them in the coming years.
“This is similar to the facility of banks to carry forward tax write offs on losses accumulated. It is a cushion for high earners to use up when they choose rather than an absolute cap.
“I will be seeking reform of this restriction to ensure its aim of restricting manipulation and abuse of reliefs by those who earn enough to play the system will be adhered to. €97.8 m of tax relief waiting to be cashed in by the wealthiest is unacceptable.
“Previous data I received showed that the top 10% of earners take home a third of all income, while the top 1% of earners now take home 11% of income.
“Overall, the highest earning 10,000 citizens in the state took home €5.6bn between them. That means that on average 10,000 people took home more than half a million euro each in gross pay.
“We know from a recent Comptroller and Auditor General report that many of the wealthiest in our country pay less tax than the average worker. Yet now we learn that 346 of these top earners have €97.8m of tax reliefs stored up. The Minister must act to clamp down.”