Dáil Éireann debate -
Wednesday, 9 Mar 1966

Vol. 221 No. 8

Financial Resolutions. - Financial Resolution No. 1: Income Tax and Sur-Tax.

Minister for Finance (Mr. J. Lynch)

I move:

(1) That income tax shall be charged for the year beginning on the 6th day of April, 1966, at the rate of seven shillings in the pound.

(2) That sur-tax for the year beginning on the 6th day of April, 1966, shall be charged in respect of the income of any individual the total of which from all sources exceeds two thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1965.

(3) That the several statutory and other provisions which were in force on the 5th day of April, 1966, in relation to income tax and sur-tax shall 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, 1966.

(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).

Mr. Cosgrave

We oppose this proposal because, as Deputy O'Higgins said an increase in income tax under PAYE can only be regarded as a wage cut. Under PAYE the net has been widened to catch a number of people who formerly were not liable to tax and in view of the advice which was given in the report prepared by the Department of Finance and the NIEC comments on it in which it was suggested no changes were necessary, this attempt to raise a total of £4.2 million in additional taxation, arising from an increase of 8d. in the standard rate of tax can only be regarded as penal, as equivalent to a wage cut, as contrary to the interests of the economy, as depressing in its effects and as contrary to the expressed views of those who had considered it first, in the Department of Finance and secondly, in the NIEC. We regard it as bad, as excessive in the circumstances and contrary to the incentives which are necessary if we are to recover economic confidence and make the improvements which are necessary and for these reasons we propose to vote against it.

Mr. James Tully

We also oppose this because apparently the Minister did not have the knowledge that he told us the week before last he would have, when we were discussing the cost of increasing income tax allowances for lower paid people. It is quite obvious the Minister has taken the easy way out and put a tax on all round with no attempt to level off the situation. The £30 additional allowance for each child over 11 years, as the Minister surely appreciates, will represent about £8 a year in the case of persons paying full tax. Does he consider that makes any worthwhile difference so far as taxation is concerned? Incidentally, for most of those people who are trying to run an old jalopy it means they will be paying more than that amount in additional road tax for the car for the year.

With the increase in tax all round, the increase in taxation will hit the unfortunate farm labourer earning £8 odd per week, who is possibly a man looking after a mother or a sister who is house-keeping for him, and who will now have to pay tax on £2 odd. Surely the Minister does not think that is the correct way to tax people according to their means. At the other end is the person, as we pointed out the week before last, who is running a car from some 40 or 50 miles away into Dublin every day for the purpose of doing a day's work and going home each evening, paying for the upkeep of the car, paying for meals in town and paying tax and now having to pay additional tax. The Minister makes no extra allowance for such people. They are still in the same situation. Then he brings in this Budget and expects this House to accept it. We oppose the resolution.

Question put.

The Committee divided: Tá, 71; Níl, 64.

Tá

• Aiken, Frank.
• Allen, Lorcan.
• Andrews, David.
• Blaney, Neil T.
• Boland, Kevin.
• Booth, Lionel,
• Boylan, Terence.
• Brady, Philip.
• Brennan, Joseph.
• Brennan, Paudge.
• Breslin, Cormac.
• Burke, Patrick J.
• Calleary, Phelim A.
• Carter, Frank.
• Carthy, Michael.
• Childers, Erskine.
• Clohessy, Patrick.
• Colley, George.
• Foley, Desmond.
• Gallagher, James.
• Geoghegan, John.
• Gibbons, Hugh.
• Gibbons, James M.
• Gilbride, Eugene.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Hillery, Patrick J.
• Hilliard, Michael.
• Kenneally, William.
• Kennedy, James J.
• Kitt, Michael, F.
• Lalor, Patrick J.
• Lemass, Noel T.
• Lemass, Seán.
• Lenihan, Brian.
• Collins, James J.
• Corry, Martin J.
• Cotter, Edward.
• Crinion, Brendan.
• Cronin, Jerry.
• Crowley, Flor.
• Crowley, Honor M.
• Cunningham, Liam.
• Davern, Don.
• de Valera, Vivion.
• Dowling, Joe.
• Egan, Nicholas
• Fahey, John.
• Fanning, John.
• Faulkner, Pádraig.
• Fitzpatrick, Thomas J. (Dublin South-Central).
• Flanagan, Seán.
• Lenihan, Patrick.
• Lynch, Celia.
• Lynch, Jack.
• McEllistrim, Thomas.
• MacEntee, Seán.
• Meaney, Tom.
• Millar, Anthony G.
• Molloy, Robert.
• Mooney, Patrick.
• Moore, Seán.
• Moran, Michael.
• Nolan, Thomas.
• Ó Briain, Donnchadh.
• Ó Ceallaigh, Seán.
• O'Connor, Timothy.
• O'Malley, Donogh.
• Smith, Patrick.
• Wyse, Pearse.

Níl

• Barrett, Stephen D.
• Barry, Richard.
• Belton, Luke.
• Belton, Paddy.
• Burke, Joan T.
• Burton, Philip.
• Byrne, Patrick.
• Casey, Seán.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Seán.
• Connor, Patrick.
• Coogan, Fintan.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Costello, John A.
• Coughlan, Stephen.
• Creed, Donal.
• Crotty, Patrick J.
• Desmond, Eileen.
• Dillon, James M.
• Dockrell, Henry P.
• Dockrell, Maurice E.
• Donegan, Patrick S.
• Donnellan, John.
• Dunne, Seán.
• Dunne, Thomas.
• Esmonde, Sir Anthony C.
• Everett, James.
• Farrelly, Denis.
• Fitzpatrick, Thomas J. (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Governey, Desmond.
• Harte, Patrick D.
• Hogan, Patrick (South Tipperary).
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Kenny, Henry.
• Larkin, Denis.
• L'Estrange, Gerald.
• Lindsay, Patrick J.
• Lyons, Michael D.
• McAuliffe, Patrick.
• McLaughlin, Joseph.
• Mullen, Michael.
• Murphy, Michael P.
• Murphy, William.
• Norton, Patrick.
• O'Connell, John F.
• O'Donnell, Patrick.
• O'Donnell, Tom.
• O'Hara, Thomas.
• O'Higgins, Michael J.
• O'Higgins, Thomas F.K.
• O'Leary, Michael.
• Pattison, Séamus.
• Reynolds, Patrick J.
• Ryan, Richie.
• Spring, Dan.
• Tierney, Patrick.
• Treacy, Seán.
• Tully, James.

Tellers:—Tá: Deputies Carty and Geoghegan; Níl: Deputies L'Estrange and T. Dunne.

Resolution declared carried.