Opposition's tax claims 'blather' - Cowen

Some 80 per cent of workers pay tax at rates of 20 per cent or less, Minister for Finance Brian Cowen insisted in the Dáil, rejecting as "blather" Opposition claims to the contrary.

During testy exchanges with Fine Gael's finance spokesman Richard Bruton, who made comparisons with Animal Farm, Mr Cowen said that the "effective position is that if a worker is earning €50,000 or less a year, he or she pays €10,000 in tax, or at a tax rate of 20 per cent or less".

While the Opposition could play around all they liked "Revenue has confirmed that of the 32 per cent of earners who pay tax at the 42 per cent rate, the tax liability of 11 per cent of them is more than offset by the tax credit. Their effective rate therefore is 20 per cent."

Mr Bruton said the Programme for Government stated that the Minister would ensure 80 per cent of all earners paid only at the standard rate, without a mention of effective rates of tax. He was "reminded of Animal Farm. The pigs who took control had a slogan 'four legs good, two legs bad' but when they decided that did not suit them, they changed it to 'four legs good, two legs better' because they were moving on two legs themselves. The Minister has adopted the same strategy and his advisers are changing the citation, like the sheep in Animal Farm to effective tax rates." Mr Cowen insisted however that Revenue's information "confirms, despite your blather, that 80 per cent of income earners pay tax rates of effectively 20 per cent or less".

Later he told Labour's finance spokeswoman Joan Burton he would decide what to do about the operations of stamp duty and developers when he received the observations of the Revenue Commissioners, who had undertaken a survey on the issue.

She questioned why the review was taking so long and referred to the deal made on land transfers at the Irish Glass Bottles site which involved a share transfer and resulted in a 1 per cent stamp duty.