Record 666,400 pay tax at top rate of 42%

A RECORD 666,400 taxpayers paid tax at the top rate of 42% this year, according to figures compiled by the Department of Finance.

This is expected to drop to 658,077 in 2006 as a result of changes introduced in the Budget by Finance Minister Brian Cowen.

The decision to raise the standard rate income tax threshold by €2,600 in the 2006 Budget represents the single biggest increase in recent years, although Mr Cowen made no commitment about index-linking the tax bands in future. This means that 31.9% of workers will pay the top tax rate, well in excess of the 20% targeted by the coalition partners in the programme for government.