I understand that Motion No. 44 is being taken by agreement.
Private Members' Business. - Income Tax Code: Motion.
I move:
That Dáil Éireann is of opinion that the income tax code is in need of urgent revision in view of the fact that it now creates considerable economic hardship for the least welloff sections of the community.
I am sorry that this motion, which is a very important one, affecting people all over the country, will only get a quarter of an hour's hearing this evening because of the two long First Reading speeches made by Deputy Lindsay and the Minister. The Minister had a longer brief than he had when moving his Estimate the last time I saw him here.
He is giving good value.
I did not last 15 minutes.
The Minister lasted 25 minutes. This motion is put down in the name of Deputy Corish and other members of the Labour Party, including myself. It is of interest that on 22nd February, 1966, Deputy Corish moved a motion on income tax. The wording was:
That Dáil Éireann calls on the Government to make provision in the forthcoming Budget for a substantial increase in personal and dependants income tax allowances as they bear no relation to the purposes for which they were originally intended.
That motion was debated over the three-hour period and the man who put the Government point of view was Deputy Jack Lynch, the present Taoiseach and Acting Minister for Finance. He He was then Minister for Finance. He was not Taoiseach. He made a number of points in the debate and one of them which recurred was: "It is unfair to ask me now to do something about this. We are near the Budget"— in fact, the Budget came in April —"We are unable to disclose what is likely to happen because it would be giving away Budget secrets." I suppose at any time of the year, certainly at the present time, one could be accused of being too near the Budget because one can never know when a Budget is coming with Fianna Fáil. We had two this year, and, according to some reports I hear, there is great danger of a third one looming on the horizon some time later on.
Of course, I have no doubt before this debate is finished that somebody will say: "It is unfair to ask us now about this because we are too near the Budget". Budget or no Budget, I suggest we have reached the stage in this country where, no matter what the workers do about improving their working conditions and wages, they cannot keep up because of the present arrangement in regard to income tax whereby the State unblushingly grabs back from them a very high proportion of the wages they are earning. I have here the Report of the Commission on Income Taxation and at paragraph 27, page 14, it says:
We recommended recognition of the principle that income tax should not be payable on the income needed for minimum subsistence; and that the effective exemption limits should be based on the personal allowances, including earned income allowance, without the complication of a formal exemption limit.
Despite this, and despite the fact that the present Taoiseach, when he was Minister for Finance, agreed he was accepting this and, in fact, had included it in the White Paper produced by the Government on the question of income taxation, despite that he argues and continues to argue that no efforts should be made to try to put this into operation. In 1960-61 the single man or woman earning £6 5s paid no income tax because the tax-free allowance was £6 5s. Many of the people at that time had under £6 per week and, in fact, could earn overtime without being taxed.
Now, with the general rate of wages throughout the country—at least for male employees—at around £10 per week—I am referring to local authority employees particularly and to farm workers and to State employees —the limit of tax exemption has not been moved. While the wages being paid by employers at the present time are, as far as I know—I am speaking as a trade union official who negotiates those wages—simply an amount which will keep body and soul together, with nothing to spare, despite that the State insist on taxing, at the rate of 7/- in the £, approximately £4 of the wage the single man is getting. In other words, the single man or woman who is getting £10 5s Od per week is required to pay £1 8s Od per week income tax. The Minister may say that the standard rate is only 4/9d: the standard rate is 7/-. It does not matter whether or not it is deducted from them at 4/9d: it amounts to the same thing. The really important point is that these unfortunate people are being treated now in the same way as they were treated in 1960/61.
The last time the Taoiseach was speaking in the debate he made some kind of peculiar argument that, because of the increase in wages, it was the right for the Government to increase income tax. He tried to turn the story back on us. Because we were claiming that, as a result of the drop in money values, the wages they were getting in 1966 were, in value, only the same as they were getting some years ago, the Taoiseach tried to turn it back on us and say it was the same with tax. He knows that is entirely wrong.
In 1966, the minimum wage, the wage which was a bare subsistence, was not taxed. I claim that, in 1968, the minimum wage—which is still a bare subsistence—is being taxed on the single man and woman to the tune of up to £4 per week, 28s tax. No doubt there will be people who will say these people are single, that they have no dependants. This is one of the fallacies to which I think the Government either are closing their eyes completely or are not aware of.
It is the general thing in the country with somebody who is working for a living—if there are ageing parents, a son and a daughter—that the daughter remains on as a housekeeper and one son is keeping the household. The father and the mother may die but the daughter will remain on. In many cases, she is unable to work. Sometimes she is able just to do odd jobs around the house. Sometimes she is a fully fit person but she has never been employed outside and whatever work she does is around the home. Yet she is not a dependant, just as for social welfare benefit, as far as income tax is concerned. The result is that that man is treated as if the only person depending on the income he is getting is himself, although everybody knows that he must look after the housekeeper or whoever is living in the home.
We have the same situation with regard to married couples. The married couple are in the position that they have approximately 10 guineas tax free but they had that in 1960/61 and the position has not changed. It did not change up to 1966 and it has not changed up to 1968. Would anybody seriously suggest that a married man with a wife only to support should be asked to pay income tax on a wage of £11, £12 or £13 per week if his tax free allowance is only 10 guineas? Why should he not have a reasonable tax free allowance? Why should the same effort not be made to ensure that a man who is getting a bare subsistence to keep himself and his dependants should have a higher tax free allowance?
There is the other case which the Minister for Finance, Deputy Haughey —I hope he will soon be back with us —referred to when making his speech on Budget No. 1 of this year. He said I have a pet case which I always trot out: I hope to continue to trot it out until it is remedied. It is the case of the man who gets up at 6 o'clock in the morning and travels a long journey to work. In order to do that travelling, he must have the use of a car. Either he himself has an old car or some of his neighbours will carry him in their car and there will be a certain payment for it.
A company car.
Deputy Tully is beginning to learn the problem of living with relative prosperity.
The average wage is £13.
He does not have a State car and a uniformed chauffeur. He must pay for the tax and insurance on his car, for the petrol, for the repairs and for the tyres.
And the better-off he becomes, the more he will have to pay for.
Let me deal with this point. Here is the man who leaves home at 7 a.m. and who travels 30 or 40 miles to work. He works very hard on an open site all day. He may get an hour or two overtime or he may not. He starts back home in the evening. The income tax people say to that man, in effect: "You have a lot of income and we must get tax. You have excess income and we must get tax on it. We cannot run the country without it." The man who finds it hard to run his own house with what he is earning must hand over a proportion of his earnings so that the country can be kept running on an even keel. The Minister talks like a person who does not know the problem. He has let the House know he is not aware of the problem.
I have had to get up early in the morning and go in a motor car to my job and pay for the petrol.
Mr. J. Tully
Has the Minister ever tried to do it on £12 a week?
I have.
It must have been a very long time ago. I doubt if the Minister ever had to work hard all day on only two or three sandwiches and a mug of cold tea and then had to start for home without having had anything to eat all day. I doubt also whether he had the problem in relation to clothes and footwear that the type of man I am speaking of has because of the type of work he does. The man of whom I speak finds that his boots need replacement every couple of months and that there is very considerable wear and tear on his clothes by reason of the type of work he does. All such a man sees of his family is for a couple of hours in the late evening because he must go off again early the next morning. I speak now for such people. We are told that such people are not allowed any travelling allowance. But the boss, who runs the job, who lives beside them, and who goes in at 10 a.m., is entitled to claim a rebate for his car. He can bring out his pals to dinner and claim for them, too. They are a different class. The Minister can appreciate their problems but he cannot appreciate the problem of the fellow who has to work so terribly hard to try to keep both body and soul together.
Debate adjourned.