In defence of her party's support for cutting taxes, Mary Harney throws down a gauntlet to the left.
The top 8 per cent of taxpayers in this country pay almost 50 per cent of all income tax. That shows that our tax system is very progressive. I do not use the word "progressive" in a self- congratulatory way - in taxation language, it indicates a system in which the more a person earns, the greater the share of their earnings is paid in income tax.
It means that a relatively small group of high earners pay most of the cost of running our public services. People of a right-wing disposition might object to that situation, but I think it's a sound and reasonable basis for social justice.
I make this point in response to Fintan O'Toole's article in last Tuesday's edition of The Irish Times. Mr O'Toole implied a contradiction between my commitment to low taxes and my belief - as stated during the recent fees debate - that the best way to collect money from the rich was through the general tax system.
I see no such contradiction and I believe that the figures, which I have quoted above, support my case.
It is widely recognised that the Government reduced income taxes from 1997 onwards. What is less widely recognised is the extent to which government policy pursued tax reform as well as tax reduction.
Tax bands were widened. Tax allowances were increased. Tax credits were introduced.
The introduction of credits - a key element in the Progressive Democrats' election manifesto in 1997 - added hugely to the fairness and simplicity of our personal tax system. The net result of these measures, coupled with reductions in tax rates, was a dramatic decrease in the tax burden on those on modest incomes.
The average tax rate measures the percentage of gross income that goes on income tax, PRSI and levies. For a single person on €20,000 a year, the average tax rate is just 13 per cent; for a single person on €100,000 a year the average tax rate is 37 per cent.
The progress we have made in Ireland has been recognised internationally. A recent OECD study looked at the direct tax burden, net of state benefits, on a single-income family, with two children, on average industrial earnings. It found that the reduction in the tax burden had been greater in Ireland than in any other country in the OECD.
In fact, it found that the average family in Ireland now receives more in cash benefits from the State than it pays in tax. That is a huge achievement and it shows that the real gainers from Government tax policy in recent years have been ordinary PAYE workers.
A recent study for the European Commission showed that reducing taxes on work - and that includes income tax, PRSI and the health levy in the Irish case - is vital for jobs. That is something which we in Ireland should always bear in mind if we want to keep this economy at full employment.
Fintan O'Toole's article may help to rekindle the political debate about personal taxation, which has been fairly dormant this past while.
The Progressive Democrats have always had a clear view on the direction of tax policy and I think even our harshest critics would recognise that we have been quite successful in achieving our objectives.
The top rate of income tax has always had a totemic importance for our opponents. For years the Labour Party has railed against any moves to cut the top rate and other like-minded parties would have taken a similar view.
The top rate of income tax was 48 per cent when the Progressive Democrats and Fianna Fáil entered government in mid-1997. We reduced the top rate in three stages, bringing it down from 48 per cent to 42 per cent. We have increased Revenue powers. We have set up unprecedented investigations into tax fraud and abuse, such as the Ansbacher inquiry. We are progressively eliminating tax shelters.
This brings me to a fundamental question with regard to tax policy and political choice in this country. I have asked it through the columns of this newspaper before and I do so again: is there anybody on the left who now believes that the top rate of income tax should be increased back to 48 per cent?
The Labour Party used to argue with great passion and conviction against bringing down the top rate. But Labour is under new management now and seems to have accepted the reductions in income tax rates brought in by the present coalition.
So, is the debate on income tax over? Or is there anybody on the left of the political spectrum who is prepared to come out and call unequivocally for an increase in the top rate of income tax?
It is a simple and straightforward challenge and I look forward eagerly to somebody taking it up.
Mary Harney is Tánaiste and Minister for Trade, Enterprise and Employment and leader of the Progressive Democrats