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Dáil Éireann debate -
Wednesday, 30 Apr 1930

Vol. 34 No. 9

Resolution No. 1—Income Tax and Sur-Tax.

I move:—

(1) That income tax shall be charged for the year beginning on the 6th day of April, 1930, at the rate of three shillings in the pound.

(2) That sur-tax shall be charged for the year beginning on the 6th day of April, 1930, at the same rates as those at which it was charged for the year beginning on the 6th day of April, 1929.

(3) That the several statutory and other provisions which were in force during the year beginning on the 6th day of April, 1929, in relation to income tax and sur-tax shall, subject to the provisions of Part II of the Finance Act, 1929 (No. 32 of 1929), have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1930.

(4) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

If there is not very much to cheer about in the Budget statement which the Minister has just read for us, it is a happy augury that there is not much for most of us to weep about. The Minister himself, I think, summed up the nature of his Budget when he said: "There is no need for increased taxation and there is no possibility of remission." That is the burden of to-day's song. It is a source of disappointment, to some of us at any rate, that some of the things referred to in the Press recently as probably under consideration when the Minister was drafting his Budget have not found a place in it. One thing which we were led to expect was a tax upon the importation of motor bodies. That matter has been under consideration for a long time, and if a tax of that kind had been put upon imported articles there is good reason for believing that it would have meant a considerable revival in coach building, an industry that was once flourishing in this country. It may, however, be that the tax is only delayed. I hope, even if it does not come now, that the tax that has been asked for by that trade will make an early appearance.

The Minister dealt at considerable length in an interesting analysis with items of expenditure which he classed as "avoidable" and "unavoidable." With his analysis of what he classed as "unavoidable" I do not agree—at least in regard to some of the items. He quoted a figure in regard to superannuation of £2,065,000, police and prisons £1,884,000, and Army £1,574,000, making a total of £5,458,000, which, with other items, he classed as unavoidable expenditure. We do not agree that all of that huge sum is unavoidable. We think that a considerable saving could be made in those three items without danger or disadvantage to the country and the citizens in general. With regard to superannuation, we do not suggest that any of the rights of civil servants, or public servants in general, should be interfered with. We do not want to deny to public servants the pension rights which are their due, but, aside from that, we think that considerable reductions could be made in those votes. Certainly, in regard to pensions paid to able-bodied men who gave very little, if any, service to the country, considerable saving could be made, and also under the heading of the army and the police. The prison service probably does not account for very much in that total, but with a change of attitude on the part of the Government, there might be some room for cutting down in regard to that matter also.

Another item to which the daily Press gave considerable attention in the last week or so—and it is possible it was under consideration by the Minister when drafting his Budget—was the question of increased allowance to men with small incomes and large families. I think that something could reasonably be done in that direction and that the money for it might be found by economies of the nature I have indicated, if not by other economies which would be possible if that committee, over which the Parliamentary Secretary for Posts and Telegraphs presides, were more active in searching for places where real economies could be made. It is not possible to attempt, and I would not attempt, to analyse any further the figures which the Minister has given at this stage, beyond saying that it is interesting to note that practically the only reduction in taxation—the other two items are very small—is made for the benefit of those who can drink champagne. It is an interesting indication of the Minister's mind. I cannot say, because I know nothing about it, that he is particularly interested in that matter, but it is a striking indication perhaps of the mind of the Ministry, if not of his own, that the only one class in the community who get any advantage out of the Budget are the gentlemen who can afford to enjoy themselves on foreign wines. I am not objecting to France getting that little bouquet. I understand that the reason that a treaty between the Free State and France has not been concluded before now is the very strong objection of the Government and people of France to the very heavy taxation put on their wines and other articles by the Free State Government.

If this brings about a better feeling between the Free State and France, and if it encourages trade between the countries, the result in the end will be good, apart from the extra enjoyment in which it may induce certain people to indulge. There is just one matter in addition to which I desire to refer. When the Minister was dealing with the question of national debt and loans he explained how he raised money in the course of the year for necessary services, when money was required, by discounting bills, short-term loans and the like. That is a very expensive way of carrying on a Government. Some months ago he might easily have foreseen that money would be cheap at this stage, and might have made an effort to take advantage of the low rate of interest before indulging to such an extent in short-term loans and adopting other methods of raising money. There is not, as I have said, much to be said at this stage about the Minister's Budget statement. It provides hardly anything to get excited over. That, perhaps, is a good thing. In a way, people will be more satisfied and will believe that we are getting to more normal stages when the Budget contains nothing of an exciting or alarming nature either in the way of extra taxation or great reduction. There are changes, not of a radical nature, in the methods of taxation that we think ought to, and could with advantage, be adopted by the present Ministry, changes which would give better conditions and improve the social services to the classes of the community that need them very badly. We believe that by a re-arrangement of expenditure and by a closer watching of the great spending departments savings could be made which would allow the Free State Government to bring much closer to the British and Six-County level the social services of the Free State. Evidently, the mind of the Minister and of the Government does not run in that direction, and they do not see that they could reduce certain services, some of which I have indicated, on which they spend a great portion of annual revenue. We believe that changes in the direction indicated could with advantage be made. Again, as often before, we urge on the Minister to look more searchingly in that direction for further savings.

It is not usual at this stage to make any general remarks with regard to the Budget statement, but to confine ourselves to the Resolutions to be proposed. I think, whether we agree with the Minister or not in his statement—we certainly do not—it is only right to say that he deserves a personal tribute from the Dáil on his personal record in being so fortunate as being able to bring in his eighth Budget. I think this is his seventh or eighth Budget. Perhaps because of that he has got into a definite Budget groove from which, I suppose, it will be impossible to shift him. I think we may make up our minds that if we are going to change the financial policy of the State we must, first of all, change our Minister for Finance. Just because the Budget might be described as an "as you were" Budget, our criticisms must be largely as they were last year. We have practically no new criticisms to bring forward. Perhaps it was right that the Minister should paint the picture he did. I hope it was not in over-glowing terms. He advised us to strike a note of cheerful optimism, and said that there was good and sufficient reason for it. I, too, would like to strike that note, but at the same time I would be more pleased if we could forget that we had with us still some important social problems that require to be urgently attended to.

In so far as I could judge from the general statement on the Budget, the Minister has no particular intention of dealing with these problems in the drastic way in which I think they should be dealt with. We have the problem of unemployment and the problem of insufficient housing all over the country. Other opportunities will be afforded for dealing with these matters, but personally I would be much more pleased if I saw some attempt on the part of the Minister to recognise that these are two problems that are, as it were, festering sores in our national life, and the Minister should face up to the problem of dealing with them in the drastic manner in which they deserve to be dealt with. As I say, other opportunities will offer for dealing with these matters.

In connection with the three small changes that are made in taxation, I would like to know if there is any assurance that we will get a quid pro quo in the matter of the reduction of the wine duties. It will cost us, I think, £12,000 per annum. That is the estimate of the Minister. I would like if he would explain on the appropriate occasion what we are likely to get in return. I agree with Deputy O'Kelly that it is rather strange that the only remission of taxation should be in that particular direction. It will be a consolation, I am sure, to the labouring man, a docker or a builder's labourer, who is anxious for a reduction in the price of his pint of beer, to know that his champagne will cost him less.

Coming to the Resolution before us in regard to income tax, I would like at the beginning to pay a small tribute to those responsible for making the estimate. I think it is rather creditable to our Revenue Commissioners, the officials of the Department of Finance or the Minister himself, to say that in estimating an amount of almost £4,000,000 they came to within £16,000 of being correct. I think that is something to their credit and while I am not slow to criticise in some respects, I like to give credit where credit is due. In regard to criticisms which have been offered from these benches for the past six or eight years I will only briefly repeat them. I think that it would not be impossible for the Minister so to adjust his income tax that the reliefs which have been asked for from these benches and the Fianna Fáil benches could be given. I believe they could be given if the Minister faced up to the task with the will to do it. I do not agree at all with the principle which he outlined when he said that to create disturbance simply for the purpose of changing the burdens, from one set of people to another, is not desirable. I do not know what is the force of the word "disturbance," whether it is a disturbance of the Minister from the set groove, in which he seems to be. I do not at all agree with the principle that it is not right that burdens should be shifted from the shoulders of one set of people to the shoulders of another set of people, if it is the proper thing to do—that just merely because you do not want to go to the trouble of re-arranging your income tax code it is not to be done. I do not think that is a sound principle and I certainly do not agree with it.

We have the fact that in Great Britain and Northern Ireland the standard rate of income tax is ? higher than here but, at the same time, the smaller income taxpayers are getting very much more relief there than is given to the smaller income taxpayers here. The incidence of the tax is entirely different. For instance, in the case of a married man who has three children and an income of £400, he has to pay £3 7s. 6d. here in the Free State and, although the standard rate is ? higher in Great Britain, a man similarly circumstanced there gets off without paying any income tax.

[An Leas-Cheann Comhairle took the Chair.]

A married man here with three children and a £500 income a year pays £10 2s. 6d. income tax; in Great Britain, even under the increased income tax, he gets off with £3 2s. 4d. In fact, on all incomes under £1,000 income tax is lower in Great Britain than in the case of a married man here. As the income reaches £1,000, the tax increases and is higher in Great Britain than here. In the case of a single man, the income tax at the Saorstát rate and the British rate is equal at about £228 income. Above that, it is higher in Britain, and it increases rapidly.

Now we have this position, that in Britain the family man is encouraged; in Ireland the bachelor is encouraged; that is, the effect of the income tax rates. If we look at the census returns, we see that there is a very considerable proportion of bachelors in the Free State, and I think the Minister for Finance will have to answer for that in some measure. His policy has, perhaps, something to do with that. I again raise this point, as it has been raised year after year. Last year I had some hope—this year I have none— that the Minister would mend his hand in that particular direction. Last year we thought we had brought the Minister to the point that he would do something. He had expressed his sympathy the year before. He virtually promised that the relief that we have been pressing for for the family man, and especially the man trying to give higher education to his children, would be given, but he dashed our hopes to the ground last year. Although there was reference to it in the newspapers this year, I felt the temptation to have a Budget "just as you were" would be too great for our present Minister for Finance to withstand. So I am not disappointed in finding things just as they were. Until we can shift the Minister for Finance, I am afraid there will be no possibility of getting the relief we want.

Leave it to us to do that.

Mr. O'Connell

Perhaps you will get some help.

You will have something to say to it.

Mr. O'Connell

Yes. There are some other points to which I wish to refer, but they will arise on the proper Resolution dealing with them.

With regard to the Budget, I do not wish to say very much beyond this: that apparently the prodigals of the spending Departments have put the Minister with his back to the wall, for the greater part of his Budget, if I may say so, was a defence of squandermania. There are one or two features in the Minister's financial policy which, I shall take an opportunity of examining in greater detail later, but I would like at this stage to express disagreement with the Churchillian principle which the Minister enunciated of meeting a budgetary deficit by increasing the public debt. I think that that principle, as has been explained already elsewhere by another Minister for Finance, is simply an incentive to undertax and overspend. We feel that as the Minister is responsible for the finances under his control, when a deficit in the public revenue arises he, as the Minister responsible for that, ought to face the Dáil with proposals that would liquidate it. Such a deficit normally can only arise through some failure either of foresight, or of courage, or of control, on his part and he ought to take responsibility for it, and not to leave it to his successors to shoulder the burden that he has created.

With regard to the income tax proposals now before us, we on these benches, like Deputy O'Connell, express regret that nothing has been done to meet the case of the poor man with a family and a very small income.

The Minister, in his Budget, has referred to the effect that an increase in income tax would have upon those who would employ or invest part of their profits in their business. We feel that he might have met the position by introducing the principle of discrimination which we so often advocated in this House, and by granting some concession to those who derive their income either from investments in, or as profits from, Irish industry. If he introduced that principle and gave effect to it in his proposals he would have done a good deal more for the development of Irish industry, and to induce people to come and live in Ireland, than he has done by maintaining, so far as the small income tax payers are concerned at any rate, what is a mere delusion—that the income tax rate in this country is lower than in Great Britain. Those of us who have had the opportunity of studying the figures, particularly as they have been affected by recent proposals of the British Chancellor, know very well that so far as income tax on incomes up to £500 or £600 a year are concerned, in the case of married people with three children, the amount of income tax paid in this country is considerably higher than the amount paid in Great Britain. I think, speaking from recollection, that the amount of income tax paid here by a married couple with three children, with an income of £400, is three guineas if the income is earned, while in Great Britain such a couple would pay nothing. If the income were £500, I think they would pay £10 7s. 6d. here, while only three guineas would be payable in Great Britain. If the income was £600 I think the income tax to be paid would be £16 or £17 here and only £10 in Great Britain. So that so far as the great mass of the income tax payers in this country are concerned, the suggestion that income tax here is lower than in Great Britain is unfounded and untrue. I do not intend to say any more at this stage on the Minister's Budget, but possibly I shall have something more to say to-morrow.

I rise to congratulate the Minister on the very mild criticism his Budget has received at the hands of the leader of the Fianna Fáil Party and the leader of the Labour Party. Deputy O'Kelly was most gentle considering the fact that in his own conscience he believed that the Minister was the greatest sinner. Yet there was no better Budget for the country than the one put before the Dáil. His speech and actions here, and those of his party, for a number of years have rendered the position of the Minister most difficult with regard to reducing taxation.

Of course, the Deputy is aware that the only matter we are discussing at the moment is the question of income tax.

Mr. Sheehy

I was under the impression that we were discussing the entire Budget and the reasons why it was presented before us in this way.

No; that will come on on the discussion of the general resolution to-morrow.

Mr. Sheehy

As far as the income tax is concerned, my impression is that the Minister should come to the rescue, if he possibly can, of the man with a family, because I agree entirely with Deputy O'Connell that to encourage bachelors, who are increasing in number, is bad policy. I hope that the Minister, when he comes to touch the matter of income tax again, will make the bachelors realise that they must stand up to the duty which they owe to the State.

I take it that one can make reference to the Budget statement as a whole, as some other speakers have done, and not necessarily to this particular resolution.

I think it would be much better if we left that over to the general resolution.

There is certain information in reference to the Budget statement that we would like to get from the Minister and that we cannot obtain on these particular resolutions. It would be advisable and necessary to have this information when we come to have the set debate on the general resolution. The ruling that we must confine ourselves to the income tax resolution is only made now and apparently did not apply to Deputy O'Kelly, to Deputy O'Connell, or to Deputy MacEntee, who spoke of other matters than income tax.

There is no new ruling. We are following the practice which is followed every year. The Deputy will not be confined absolutely to the resolution, but he will appreciate that if he is going to wander on this particular resolution into a discussion on the Budget as a whole, then he will be anticipating what will take place on the general resolution.

I do not intend to anticipate the general discussion, but I want to make certain remarks concerning statements made by the Minister which do not affect any of the resolutions that will come before the House, which relate to the position in respect of the national debt and other matters of that kind.

The Deputy will have an opportunity of doing that on the general resolution.

I want to try and get some information from the Minister, which I intend to use in the general discussion.

The Deputy will probably get that on the different resolutions.

Deputy O'Connell remarked that the Budget statement indicated that the Minister's stock of ideas had become exhausted, and that if we wanted to change the financial outlook of the Government we could only do so by changing the Minister for Finance. I want to endorse Deputy O'Connell's statement. I think that the humdrum nature of the Budget statement is a reflection of the barren——

Mr. Sheehy

I rise to a point of order. I was taking up that point of Deputy O'Connell's, and you, sir, stopped me. If the Deputy is going to go for him, I am going to go for him also.

I can only hope that Deputy Lemass's intervention will not be any longer than Deputy Sheehy's.

I want to express my opinion that the Budget statement we have heard is an indication that the Government are absolutely indifferent to the big major economic problem with which the country is confronted. It may be a nice thing to have a placid statement, an air of satisfaction and contentment created by the indication of the fact that there is no change, but it is poor consolation to those unemployed who are emigrating because they cannot get a livelihood that the Government have no proposals to make, which indicates that they have no solution to offer of the economic problem that faces the country.

This is a speech which in my opinion should be made on the general resolution and not on this.

I shall have an opportunity of making it on the general resolution. I think I am in order in drawing attention to the fact that there is not contained in the Budget any proposal to give protection to any industry in this country, and thus increase employment.

Not on this resolution. The Deputy can do it on the general resolution.

Might I draw attention to the fact that the Minister has decided to deduct from the total estimated expenditure a sum of £1,200,000 which he claims represents abnormal items of expenditure which could be legitimately met by borrowing?

That is a matter also that will be relevant to the general resolution.

I want to ask the Minister how he reconciles that action of his on this occasion with the statement he made when introducing the Budget last year.

I have already told the Deputy that all this will be relevant on the general resolution, but is not relevant on this.

This is a new ruling applying only to myself?

No, certainly not.

Deputy O'Kelly and Deputy O'Connell have referred to this particular matter.

I was not in the Chair when Deputy O'Kelly and Deputy O'Connell were speaking, but I am quite satisfied that the Ceann Comhairle did not allow Deputy O'Kelly or Deputy O'Connell to wander away from the resolution in the way in which Deputy Lemass has wandered.

I am quite certain that the Ceann Comhairle allowed them to talk about French wines and champagne, which have nothing to do with this resolution and which will come up on another resolution, whereas the matter I am referring to cannot come up on any resolution except the general resolution to-morrow. If that is your ruling I am not going to question it. It seems to me that it would have been better to have the matter dealt with at the beginning. The Minister told us that it is not possible to make any allowance to the income taxpayers with small incomes. He admitted that for a number of years the Government have been urged to give relief to income taxpayers with the smaller incomes, particularly to those with families. He then proceeded to endeavour to create a false impression in the public mind by stating that this allowance could only be given by the imposition of indirect taxation, particularly upon the necessities of life. He did admit later on that the allowance to the smaller income taxpayers with families could also be financed by an increase of the standard rate, or by so modifying the burden of the tax that those with larger incomes would pay more. But that is not advisable, he said. It is not the policy of his Government to case the burden upon the poorer man by increasing it on the richer man. It is true, as he knows, that the man with the smaller income pays proportionately more here than in Great Britain. The Minister is anxious to preserve that position, because he thinks that by so doing he will induce a number of the dukes and lords and carls whom we drove out ten years ago to come back and establish residences here. That is his hope and aim. The poor people of the country must continue to pay through the nose, because the Minister desires to create a proper social atmosphere in which he and his colleagues can perform the new stunts which they have been learning at garden parties and dinners at Buckingham Palace and other places of the kind. It does not matter to the Minister or his colleagues apparently that the burden of the tax upon the small man constitutes a very considerable hardship, provided that these few millionaires whom he has in mind, who can afford to keep a country house in Ireland and a town house in London, may be induced to come back here and establish permanent residences and reconstitute the era of the landlord and the local Nabob, so that the people may again get into the habit of touching their hats to a lord when he passes along the highway.

We do not want these people here. I think the country would be much better off without them. I think if the only way in which relief can be given to the smaller income taxpayers is by an increased burden upon such people, that burden should be increased. The fact is, however, that these people would still have sufficient inducement to bring them into this country, even if the standard rate was increased by 6d. in the £. and relief given to the smaller income taxpayers by that means. The standard rate here is 3/-, while in Great Britain it is 4/6d. If a difference of ?d. in the £. is likely to bring these people into this country to establish permanent residences here, so also will a difference of 1/-. But it has not done so. These people have not found that their anxiety to avoid paying tax to the British Government is strong enough to urge them to take the drastic action of establishing a permanent residence in this country. I do not think it is likely to have that effect. Neither do I think that an increase of 6d. in the £. in the standard rate would affect business in the manner in which the Minister indicated. The business man whose attitude towards home industry would be definitely affected by a variation in the income tax rate is of very little use to this country. In any case, may I again point out that if the standard rate was increased by 6d. there would remain a definite inducement to him to favour industry in this country rather than go abroad with his capital for the purpose of investing in England. I maintain that the reasons which the Minister gave for not making this allowance to the smaller income taxpayers with families indicate an attitude of mind in the Government which should secure for them the opposition of those people in the Dáil who were elected by the votes of poor men and not by the votes of dukes, lords and millionaires who have not come here yet, even though as a result of the Minister's attitude one or two of them may come here.

The Budget is, if anything, an indication of a variation of the policy of the Government in the wrong direction. There was a time when they seemed to feel that it was their duty to so alter the burden of taxation here so that it would be made lighter on the shoulders of the poor and heavier on the shoulders of the rich. The fact is that the poor people, the workers of this country, pay a much higher proportion of the total tax revenue of the State than they do in England. The yield of direct taxation here is, I think, only about 40 per cent. of the total. The yield of indirect taxation, which is paid in the main by the poorer classes, is about 60 per cent. of the total. The position in England is the reverse. The Minister here is not prepared to take any action to remedy that position, because by doing so he might make the country less attractive to a few dukes, millionaires, or earls. I, personally, am not satisfied with that policy, and I hope this Dáil will express its dissatisfaction. I hope, when the general resolution comes to be voted on, that we will get an expression of that dissatisfaction by a vote against the Government.

I think the general public outside this House will view with very considerable satisfaction the Minister's Budget statement, because I think there has been a certain amount of uneasiness that it might be necessary to have increased taxation. We are glad to see from the report he has given us of all the items of taxation that it will not be necessary. There is only one matter I would like to touch on. I am glad to see that the Minister has been able to give effect to the relief on motor vehicles.

That does not arise on this motion.

Mr. Wolfe

The Minister mentioned it in his statement.

It does not arise on this resolution dealing with income tax.

Mr. Wolfe

I will leave it then. As I say, the public will view with satisfaction the fact that it has not been necessary to increase the income tax or super tax. In spite of what Deputy Lemass has said, that we do not want to have millionaires, dukes or lords, I think the country generally will view with satisfaction the advent of money into the country, whether it comes with dukes, lords or anybody else. If people come from America or other countries who have money to spend, the country will be very glad to see them and will give them a very hearty welcome.

In answer to Deputy Wolfe, I would like to support what Deputy Lemass has said about this matter. It might easily have happened that the Minister would have increased the higher amounts of income tax for the purpose of getting a healthy distribution of money in the country—to relieve the poor man and to make the burdens heavier for the very rich. We do not want to make Ireland the happy hunting ground of those international persons who belong to no country, though they are extremely rich. They go where their pleasure calls them. They come to Ireland for hunting and fishing. They go to Scotland for shooting and fishing. They are increasing in types; that is to say we have all sorts of nations contributing. We have foreigners of all kinds. They are no good to any country. They make the ordinary workers of the country sycophantic and dependent on them. They are a most unhealthy element. These people should be taxed for the benefit of the State and if, ultimately, they tend to get out of the country I think it will be a healthy tendency on the whole. They are only a very small class and they really have no country at all.

I would like to ask the Minister whether he should not have brought in a money resolution dealing with the moneylenders somewhat on the same lines as he dealt with hawkers. I do not know whether he proposes to deal with them in a different way. He might be able to mention that, as he promised to do so. Ten pounds is the amount we suggest. There is another matter I desired to mention, but it arises rather on the Finance Act. The Minister promised last year to give drawbacks in the case of persons importing motor parts.

It does not come under this resolution. The Deputy will get an opportunity for that on the general resolution, which has a very wide scope.

It was an oversight that a resolution in connection with moneylenders was not brought in. I am bringing in a supplementary resolution, so that matter will be disposed of. Deputy O'Kelly expressed regret that a certain protective duty had not been imposed. The question of the tariff on motor bodies is before the Tariff Commission. I understand that they are now very well advanced with the preparation of the report. If their report recommends a tariff, a tariff will be imposed. If their report does not recommend a tariff, there will not be a tariff. In any case, the matter will be then before the Dáil for discussion with all possible information available.

Deputy O'Kelly also suggested that a new issue of national loan should have been made before this. Up to a very short time ago, the conditions were such that it would have been impossible to issue national loan. Certainly, it could have only been issued on very undesirable terms. It was impossible to issue a loan before the Budget. It would be impossible in any year, within two or three months of the Budget, to make an issue of loan on the most favourable terms, because all sorts of suggestions in regard to the possibility of new taxation, and so forth, would get out and would prevent proper arrangements being made for the issue.

Deputy O'Connell asked a question about the duty on wines, but I shall leave it over until I come to deal with that matter on a subsequent Resolution. There are important social problems remaining to be dealt with here. There are many difficult problems before us, but what is encouraging in the present situation is that there is no indication, as there was at one time in the Saorstát, that those problems are likely to become worse. The encouraging feature of the situation is not at all that the problems have disappeared, but that the problems have ceased to grow worse, ceased to grow more pressing, and that there is every indication that we will have the means gradually to deal with them. They are problems for which nobody has a ready-made solution. They are problems that no country seems to have been able to solve, and they are problems that there is no great likelihood that we shall completely succeed in solving either. But if we can reduce the hardships that they cause and reduce the exact size of the problems themselves within a reasonable period, then we will be doing as well, I think, as any other country.

Deputy O'Connell said, in criticising us for not providing additional relief to the small income taxpayers, that the Saorstát was encouraging the bachelor, whereas in Great Britain the family man was encouraged. Of course, that is not a correct description of the position at all. It is not correct to say that, any more than that within the last few years greater reliefs have been given to the smaller taxpayers in Great Britain than have been given here. The incidence of the income tax is to some extent different here and it is bound to be different because conditions are different. It would be possible for the British to give reliefs that we could not give without losing almost half our total revenue. Without losing perhaps more than one-eighth of the proportion of their revenue from income tax, the British could give reliefs which would mean, if we gave them, that our revenue from income tax would be insignificant. Yet their revenue from income tax, with these reliefs given, would still be very large. The fact is that we have not the great accumulations of wealth and we have not the great numbers of people from whom very great revenue in the way of income tax can be obtained. Consequently, it is very likely, until there can be economic growth and accumulations of wealth here, that the incidence of income tax here will be considerably different from what it is in Great Britain.

Deputy Lemass seems to have really no use for a great number of people. I take the view that there is no use in saying that a man who might start industries here or who might develop industries is no good because his views are not stronger than they actually happen to be. We have all too few people who, on any ground or for any reason, will support and extend industries here and it is not profitable to indulge in attacks on them or to say they are not to be considered or that they are not of any use to the country. With regard also to people who have large incomes and who have some connection with this country, Deputy Lemass and, I think, Deputy Little, seem to hold the view that instead of encouraging them to come back and spend their money here, to bring back to this country the ownership of the capital which is theirs, we ought to tell them to stay away, that they are a good riddance and that we do not want them any more. Deputy Lemass talked a great deal of nonsense about people who are elected here by the votes of earls, dukes and millionaires. There are not so many of these people here that they could elect a Deputy, even if there was a constituency arranged to suit them.

South Dublin!

I do not know that there are a great many earls, dukes and millionaires in South Dublin. I cannot imagine any constituency where there would be many such people. The Deputy indicated generally that there was some disposition to consider the interests of the wealthy and disregard the interests of the poor. The real thing we are trying to have regard to is the possibility of increasing the wealth and the productivity of the country. It could very easily happen that a small number of people returning here would give us additional revenue in the way of income-tax equal to £100,000, enough to finance the scheme which was prepared last year by the Committee that was set up to consider how, at the least possible cost, some appreciable reliefs could be given to the smallest class of taxpayers. It would be quite easy if a very small number of these people came to get enough revenue to give these reliefs. If we could get revenue to give reliefs in that way, it would be a very important thing for the country, because, in addition to getting this extra money by the coming in of taxpayers whose income tax is divided with Great Britain and who by being solely resident here would have to pay their income tax here, it would be far better to get revenue from new taxpayers than by increasing the burden on others. Moreover, if people like that did come in in considerable numbers, very much greater sums than we would obtain in tax would be actually spent in the country and would be of very considerable advantage to the country. I do not think that conditions are so good here and that our resources are so great that we can afford to ignore possibilities of strengthening the general economic conditions of the country.

Deputy Little talked about people who come temporarily into the country for fishing, shooting or for various reasons. His argument would apply with a great deal more force to tourists who come into the country. Other countries spend, and this country, by means of subsidies from local bodies, is spending an appreciable sum to attract tourists to the country to spend money and give employment. It seems to me that it is an absurd view of national dignity for us to take that of all countries in the world we are not going to have these strangers coming amongst us. On the other hand, if it is desirable and profitable for the country to attract tourists, it is more desirable and profitable to attract permanent residents to the country, people who have some associations with the country and who have control of considerable wealth, people who probably in the past were politically opposed to the majority of the people of the country, and perhaps may even have been described in a sense as enemies of the country, but who, if they came back in the new situation would presumably be prepared to accept the change that has taken place and be good citizens by throwing in their lot with it and bringing up their children as good citizens of the country.

I do not know whether a difference of 1/6 is going to bring in very large numbers or not. I do know that the difference of 1/- brought in a certain number. If a certain number came when the difference was a shilling, the possibility is that when the difference has been increased a greater number will come. I do not know whether a sufficient number will come to give us an additional £100,000 a year in income tax, but I indicated in the Dáil last year that we have a scheme of relief for the smaller taxpayers which is not equivalent to the British scale of relief but which would cost £100,000. If the £100,000 were available, I have indicated quite definitely that we would be prepared to put that scheme into operation. In any case, I think that there is no use in talking, as Deputy Lemass talked, about Deputies being elected by dukes and land-owners and about the revival of landlordism. There can be no revival of landlordism. Even if a man tried to buy up land, which he would find difficult, there could not be a revival of landlordism, because there are articles in the land codes which prevent that. There is no use in raising up bogeys, and there is no use in preventing developments which, from every point of view, in my opinion, would be an advantage to the country.

It certainly would be an undesirable thing that millions of pounds which in the past could have been described as Saorstát capital, and which perhaps could still be so described, should be lost to the Saorstát by the emigration of the owners, and in our present circumstances there is no use in thinking that people are going to be public enemies simply because they are owners of wealth. Under the system which exists here and throughout the greater part of the world, industry is in the main carried on by private enterprise, with capital provided by private persons. One of the things we do suffer from is that there are so few persons of considerable wealth who might invest in industry, and of those that there are, there are perhaps not enough interested in this country. This is, perhaps, more apropos of the remarks made by Deputy Lemass than of the Resolution, but still I think it is fair to mention it. There are people with incomes like £250,000 per annum who might settle down in this country. If one person with such an income settled down here, it would immediately give us about £80,000 per annum in income tax. We would need only two or three people like that, or five or six people with half that income, to get enough to provide the reliefs that so many Deputies have talked about.

Deputy O'Connell asked what exactly I meant by saying that I did not believe in causing disturbance simply for the sake of shifting the burden from the shoulders of one set of people to the shoulders of another. What I meant to indicate was that while we were not going to impose taxation which was not otherwise necessary merely for the sake of giving relief to a different set of people, if other circumstances caused changes in the scheme of taxation to become necessary, it might easily happen that it would be convenient, in making the changes, to give reliefs for which we would not set out simply and baldly to impose taxation in order to find the money. I do not think I need say anything more on this point.

It is very easy to argue in favour of higher taxes, and it is very easy to argue that we should make the wealthy pay, but there are, particularly in this country, limits to the extent to which that can be done. Much more than Great Britain we might lose actual national wealth and actual national revenue by the adoption of a policy that would in any way conform to what seems to be the spirit of the remarks made by Deputy Lemass on this Resolution.

Is the Minister not assuming too much when he assumes that if wealthy people are attracted back to live in this country they will bring their capital with them for investment here?

I never suggested that they would bring their capital with them for investment here, but at one time an estimate was made that there was £200,000,000 of Saorstát capital invested abroad. The sense in which that £200,000,000 was Saorstát capital was simply that the people who owned the £200,000,000 lived here. If the owner of a particular block of property anywhere in the world is a permanent resident here that property is Saorstát owned; if the owner leaves the Saorstát, the ownership of that property, as well as the income arising from it, leaves the Saorstát. If it leaves the Saorstát there is this to be considered, that while people in the past who have been wealthy did not share the political sentiments of the majority of the people and were not in sympathy with them, we must not hold that that would be so in the future. There is every possibility that wealth owned by a permanent resident here might to some extent become available for the development of Saorstát industries, but if the people who own it cut the painter completely there is no possibility of its being available.

I think it is a pretty big assumption that such people will realise their capital abroad and come over here to speculate.

I never suggested that.

Is it not the case that keeping income tax low here, assuming that that is the definite policy of the Government, for the purpose of attracting such people, might simply result in this; that a certain number of wealthy people will come over here to live, that their investments will remain abroad, that all they will draw in this country will be part of their incomes, that they will arrange, as I think the Minister more than suspects and probably has proof of, that a considerable amount of their incomes will accumulate at compound interest, and that the only advantage to the country will be that they will live here, pay house rent and rates, and buy a little Irish produce?

And die here.

Is not that likely to be one of the developments of this effort to attract wealthy people to the country.

We would have the advantage that these wealthy people would live here and die here.

That is the best thing they could do.

I do not suggest that that was the purpose of keeping the income tax low. That is one thing that is in mind but only one.

Will the Minister tell us if Deputy Keogh has represented the Government's policy correctly? Is it their intention to attract these people here to ensure that they will die here?

Of course, it would be a very good thing if they died here, after a due interval and without any violence.

People live here longer than in any other country.

What increase in the standard rate would be required to finance the scheme of the Departmental Committee in regard to allowances for families?

They did not contemplate an increase in the standard rate; they were on a different thing. I could not state that at the moment.

Resolution put and declared carried.
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