In previous years I spoke at some length on this section but I do not propose to do so this year. This is the section under which we are renewing for a further year tax legislation at present in force and it gives us fairly wide scope. I am availing of the section for the purpose of pointing out to the Minister the increasing extent to which he is relying on wage and salary earners, persons paying income tax under Schedule E, for tax revenue, and of pointing out to him that the relative increase in the tax burden of wage and salary earners is gravely inequitable.
I wish to point out to him that wage and salary earners are taxed under the most severe, rigid and exacting section of our tax laws, that they are the only section of the community who have no way whatever out of the income tax net. The rule as to expenses which may be charged by wage and salary earners against assessable income is one which has been condemned time and again by the courts as inequitable. There is a very obvious amendment of the expenses rule which would have the effect of alleviating the justifiable sense of grievance under which wage and salary earners labour, yet the Minister persistently refuses to make that change.
I wish to renew my protest. We are here renewing the existing personal allowances for income tax purposes. Allowances are granted to individuals for their own subsistence and that of their children. These personal allowances are considerably out of date. They are very much out of tune with the times in which we live, very much out of tune with the rapid rate of inflation to which our economy is at present being subjected.
The Commission on Income Tax which sat for a period of many years and issued several painstaking, detailed reports, with many recommendations, most of which have not been implemented, recommended a change in approach to these personal allowances. For budgetary reasons, the Minister has not seen fit to accept these recommendations. I wish to point out to the Minister that the personal allowance for a married man and his wife in 1938 stood at £225. It is easily provable that today's pound, in terms of 1938 values, is worth precisely 6/8, and if one were to be logical and consistent, the 1938 personal allowance of £225 would now be exactly £675. In fact it is £372.
They are very simple figures, easily understandable by even lay people. This type of income, as distinct from that of the corporate taxpayer, is more and more being relied on for tax revenue. The individual earner, under PAYE, is left with no way out of the tax net. It is true to say that the PAYE taxpayer is, broadly speaking, the person who is also paying indirect taxation at a very high rate. Indeed, today, not only is he being subjected to regressive indirect taxes on his consumption but there are concealed indirect taxes such as one to which I referred here last week on the Transport Bill—the indirect tax on Dublin citizens' bus fares. It is a cardinal principle of taxation that the tax burden should lie on the shoulders most readily capable of bearing it. It is true that in this country wage earners and salary earners are subjected to inequitable taxation. They are expected to pay direct and indirect tax far more than their share of the national cake warrants. The Minister has yet again, in this year's Budget, failed to appreciate that viewpoint.
There is one other matter to which I should like to refer at this stage and that is a matter about which Deputy Cosgrave has been speaking in another context—Schedule A taxation. The Income Tax Commission have recommended substantially the abolition of Schedule A taxation on the residential occupier of his own home. Schedule A tax is an archaic survival from Ricardo's theory on economic rent from discredited 19th century economists. The theory that a home owner has a cash income from the ownership of his home in which he lives is one which, in today's context, is quite absurd. It is a theory which was of great advantage to property owners in the past. The Minister happily has largely removed that advantage. In section 10 of today's Bill, the Minister is admittedly—