Think carefully before seeking to cut taxes for top earners

It is some 25 years ago since Mr Andrew Neil, editor of the Sunday Times wrote a strong editorial outlining a strong correlation between reductions in the marginal rate of income tax and the increase in the proportions of total income tax paid by high earners.

Not only that but he also pointed to a similar increase in total tax paid by this group following such cuts. He also called for further tax cuts for the group on the basis of the evidence he had outlined. He did not however venture any other possible explanation for this phenomenon and remarkably there was scarcely a murmur against this view.

Mr Enda Kenny recently spoke of future tax cuts. Others have called for a higher rate of marginal tax or a third tier of tax for high earners. During the past two weeks both RTÉ Radio 1 and Newstalk have put forth similar views to those of Andrew Neil stating that the case for a higher rate of marginal tax on high earners was untenable since the proportion of tax paid by this group was almost two thirds of the total and rising.