This motion gives an opportunity to the Seanad which it is deprived of by the fact that the Budget statement is made in the Dáil. I think the opportunity should be availed of to make some general comments upon the tax system and the finance scheme that is at present operating and, with the permission of the House, I propose to analyse somewhat the position. The Bill makes provision for finding a sum of twenty million odd pounds as tax revenue. The Minister's statement on the Budget showed that the estimated tax revenue was £20,436,000, and the non-tax revenue £3,528,000. For the purpose of the figures I have to place before the House I want to deduct the revenue which is received for the Post Office services. That is to say, we have £22,193,000 to deal with on the side of revenue. The Minister for Industry and Commerce made a statement in the Dáil a week or two ago that was very pertinent and extremely important in respect of this matter. He pointed out that by the figures produced by the Census of Production on the industrial side, and also by the figures which were provided by the Statistics Department with regard to agriculture, we had a net agricultural output in 1926 valued at £53,500,000, and in respect to other productive activities the estimated output was £31,500,000, that is to say, a total of £85,000,000 was the agricultural and industrial output of this country in 1926. We may add to that, sums received as dividends on foreign investments, £12,500,000; pensions paid by the British Government to citizens of the Saorstát, £2,100,000; emigrants' remittances estimated at £2,200,000, or roughly let us say, £17,000,000 under these heads, making a total money value of £102,000,000. There may have been changes and some additional amounts; there may have been changes in market values for 1928 and 1929 as contrasted with 1926, but one might say, in round figures, that the sum upon which the State can draw is round about £100,000,000 to £110,000,000.
We are now asked in this Bill to provide amounts for making up a sum of £23,000,000, of which £20,500,000 is to be tax revenue. I think that is a very important fact that 20 to 25 per cent. within one or two per cent.—it does not materially alter the argument—of the total earnings of the country are taxed for the purpose of expenditure under Government auspices. I think it is well that Senators and the country generally should appreciate that as a very important fact. It is a very high proportion. When I say that I am not asserting for a moment that it is badly spent, that it is unwise or unjust or uneconomic to draw from the total fund such a sum to be expended for Government services. I can conceive, and I think I could argue successfully, that a great proportion of that money is more wisely, more judiciously, and more economically spent for the welfare of the country than it would be if it were spent by the individuals who earned it.
The purposes for which this money is collected have to be taken into account. I find from an analysis of the estimates and expenditure according to the finance accounts of previous years, certain very important details that I think the House should be made aware of. I am taking the sum provided for in the Estimates, added to the sum which will be expended out of the Central Fund. When one hears, as one does hear, so much about the cost of Government, I point out that what are Governmental services strictly, such as the costs of the Departments, army, police, prisons, law courts, and revenue, is rather less than £6,000,000 or 25.2 per cent. of the total expenditure for various national services. I said it is possible that the money expended through Government channels is more wisely, more beneficently and more economically spent than it would be if spent by the individuals who originally earned it. I want to support that by certain figures. I take it that no one will openly avow that there should be a reduction in the amounts spent on old age pensions. Few will assert that the amount spent by the State, that is the State contributions to unemployment insurance, should be reduced, that the housing grants should be reduced, or that the State contribution towards health insurance, hospitals, sickness prevention services or local government should be reduced. These various items which must be met if we are to keep up our reputation for humanity and civilisation, would otherwise fall upon individuals, either through the rates or through private charities. At present they are moneys collected by the State and expended by the State, as I aver, more economically and beneficently than would be the case if the money was paid out by the individual.
The total cost of social services is £3,368,000, or 15½ per cent. of the total expenditure by Government. Then we have what I call economic services—aids to rates, local loans, public works, beet subsidy, road fund, agricultural credit, agricultural grants, local taxation grant. Land Commission and a deficit on the Post Office. These are services which are not strictly Governmental responsibilities in the old and narrow sense, but they amount to £4,477,000, or 19 per cent of the total expenditure. Property losses and personal injuries amount to £513,000, or 2.2 per cent of the total expenditure. Debt charges, including the annuity to the British Government in respect of local loans, amount to £2,555,000, or 10.8 per cent., and pensions amount to £2,061,000, or 8.7 per cent. I give these percentages because I am drawing special attention to the fact that the services I have enumerated under the heading of social services, economic services and aids to the rates, as well as education, amount to 53 per cent. of the total expenditure. So that in fact, when we are dealing with government proper it is only 47 per cent. of the sum in question which may be charged as Governmental expenditure.
These facts, I think, should be taken serious note of by anyone who is inclined to discuss the problems dealing with taxation and with national expenditure. The fact that we are spending so large a proportion of the national income through Government channels forces us to ask the question: What is to be the tendency, and how are we going to minimise the burden so that this high proportion of the total revenue collected by the State can be reduced? I am very firmly convinced that it is not by a reduction of the national charges we are going to make any improvement. In fact, I believe that the inevitable tendency which cannot be resisted will be to increase and not reduce the amount that has to be nationally raised by taxation or otherwise. I venture to prophesy that as we proceed, perhaps in the very near future, we shall find that the tendency of politics here will be to range ourselves on one side or the other of the proposition that the social services and the economic services, paid for out of Government funds will have to be increased, certainly maintained, and that the charges will almost inevitably rise rather than fall. One side will say that the maintenance of these economic and social services is paramount and essential, while the other side will say that at all costs they must be reduced. I think that will be the issue upon which parties will decide future political alignments.
The Bill before us deals not so much with expenditure as with revenue, and here again we ought, I think, to analyse the figures which have been presented to us from time to time, and I make the attempt to put before the Seanad certain results of the analysis which I have been able to make. I am taking the figures for 1927-28, which are the latest figures submitted to the Oireachtas. I do not think the present year's figures will vary very much. They will vary slightly here and there, but in general it will be found that these figures will be applicable to the present year's expenditure as well as 1927-28. An analysis of the accounts for that year shows that of the total sum received— £20,356,000—by tax revenue, 65 per cent. was received through customs and excise, whilst 35 per cent. are in a group which I call taxes upon property and property-owners, such as income tax, estate duties, corporation profits, licence duties, motor vehicle duties, etc. Taking that classification I find that the propertied class, if I may use the term, paid in that year 36.50 per cent. of the total tax revenue of the country. Taking a similar classification for Great Britain, they paid 62 per cent. of the total tax revenue of that country. The duties upon intoxicating liquor and tobacco—this is a very important figure, and I ask the House to take note of it—totalled 49.50 per cent. of the tax revenue of the country for that year. That is to say, what may be called voluntary taxation, taxation which may be thrown off by the individual and may not be incurred if he so wishes, amounted to half the total tax revenue of the country. The taxation on clothing and household goods provided 6 per cent., food 4½ per cent., pleasure, entertainments and sundries 3.50 per cent. I think these figures are illuminating, and will help the Seanad to get a better perspective when dealing with the problem of taxation and how that bears on the community. Possibly some of my friends will say that I am giving a handle to the propertied class, and announcing to them the fact that they are bearing a grievance inasmuch as though they only constitute a small proportion of the population they bear 36½ per cent. of the total taxation. I make the very rough—it is not scientific— estimate that the class which bears this income and property tax constitute not more than one-tenth of the population.
The Minister for Finance, some three or four years ago, made the statement—he did not assert that it was scientifically accurate—that the number of income tax payers in the country was probably from 60,000 to 65,000. I do not know whether later experience has confirmed or altered that figure, but, accepting it as fairly reliable, I think we may take it that that class of the community, with their families, would constitute round about one-tenth of the population of the country. I ask the Seanad to bear this fact in mind that, according to the Revenue Commissioners' returns, the total income of income tax payers for the year in question amounted to £53,000,000. That is to say, that half the total national income was appropriated by—I am not using the term in any invidious sense—or shall I say, enjoyed by one-tenth of the population.
I want to draw attention to the direction and the tendency of our fiscal legislation in recent years. For the financial year 1923-24, a married couple with three children, enjoying an income of £2,000 a year, all of it derived from investments, paid in tax £393. For the current year they would have paid £236. That is to say, they will have saved, comparing this year with the year 1923-24, a sum of no less than £157. A similar family, with an income of £5,000 a year all of it derived from investments, would have saved £588 for the year 1929-30 as compared with the year 1923-24. Bear in mind that during this time the incidence of taxation has fallen with increasing weight upon the poorer sections of the community. During that period when food and other household taxes, small proportionately as they are, have been increasing, the call upon the wealthier taxpayers has been very greatly decreased. When one thinks that in these four years a married couple with three children with an income of £5,000 a year, all derived from investments, will have saved the sum of £588 in the payment of tax while the poorer sections of the community are having their taxation increased, one feels rather ashamed at the tendencies.