: My first point is on the informational aspect of the problem. When he began his remarks on the section the Minister pointed out that the number of married women who were assessable paying tax under PAYE or otherwise was 100,000. This is the same answer which he gave me in reply to a parliamentary question on Tuesday, 14 February 1978. In that question I also asked the Minister to state the amount of tax paid by married women assessed under PAYE or otherwise in each of the last three financial periods. The Minister had to tell me that that information is not available. We would like to know whether this information can be made available in the future and whether he will instruct the Revenue Commissioners to so organise their statistical service that this kind of information, which is absolutely essential for the formulation of public policy in this area, is available.
There is a very widespread suspicion among women in general, and married women in particular, that they are contributing a disproportionately large slice of the total income tax take to the Exchequer. They are not able to put a finger on it because they are only so many individuals. The Minister and the Revenue Commissioners have the information somewhere in the files. If it can be obtained or if the information-gathering system can be organised in such a way that this information will be available in the future, we will be able to plan for the development of taxation and fiscal policy on a much more genuine basis.
Deputy Barry and the Minister have made the point, which needs to be stressed, that this is not a concession in cash terms to married couples. After the Minister's speech in Dún Laoghaire on 11 March last there was a very widespread public belief that the changes which he would introduce in this Finance Bill, apart from those already announced in the budget, would involve cash savings for married couples and, in particular, for married women. The practical results of this section can be easily spelt out. The example I would give is not in the least bit well heeled. I refer to a husband and wife who each earn around £3,500, which is as close as makes no difference to the average industrial wage. On the assumption that each of these people qualifies only for the ordinary personal allowances—I make that assumption because the other allowances, such as allowances for dependants and so on, can be claimed by people who are either married or single—their tax liability can be calculated roughly as follows : a single person earning £3,500 will pay £746 in tax; a married man whose wife is not working will pay £444.50; a married man whose wife is working will pay £364 if they opt for separate assessment; a married woman, if they do not opt for separate assessments, will pay £1,279. In the case of a married man with a wife who is working, the liability is £821.50 each, if they do not opt for separate assessment. In this example, which is not at a very high income level, the married man and his wife each pay more tax than single people or than their colleagues whose spouses do not work outside the home.
The result of this section is that all the Minister has done is to lessen the tax burden for the working wife but it does not remove discrimination against her and it increases the tax burden for the husband with a working wife, especially if the wife opts for separate assessment. The result is that husbands and wives who are both working are equally discriminated against, not equally privileged. The net point— and this is what the discussion is about—is why a man whose wife is working should have a smaller take-home pay than all his other colleagues. The same is true for a married woman. We would hold that tax discrimination is a discrimination against working wives since the contribution which they can make to the family income if they happen to be married to another wage earner is less than that which can be made by any other person in the household, such as a son, a daughter or a lodger.
There is another point which I do not know if the Minister has cleared up adequately, and this relates to liability for unpaid tax. I have read the section with some care but to the best of my knowledge it does not seem to remove or to alter section 192 of the 1967 Act, which provides that a woman's income chargeable for tax shall in the case of a married woman living with her husband be deemed for income tax purposes to be his income. The Minister in his initial remarks said that this section makes the individual spouse accountable for the amount of tax apportioned to him or her separately. It is possible that I am not reading the section with sufficient assiduity but I do not see anything in this section which romoves or alters that aspect of section 192 of the 1967 Income Tax Act.
I spoke earlier on, and the Minister has spoken at some length, of income splitting as the goal towards which we should be moving. It is true that when I spoke on the Second Stage of this Finance Bill I was under the impression, as were many other people, that this piece of window-dressing was income splitting. The Minister corrected me at the time and I have since found out that he was right. Even if we are to accept that the Minister is heading towards income splitting, we still have to ask ourselves whether this is the right way of going about it. The Minister was critical of the proposal from this side of the House that we should proceed towards a position of equality and attempt to equalise or to remove the anomaly that would thereby be created in relation to one-income families by introducing a family allowance. He mentioned two difficulties in relation to such family allowance: the problem of deciding the level at which we should set that allowance and the problem of deciding the criteria to be adopted in deciding who should get it.
With due respect, it seems that the problems the Minister has mentioned —no doubt he could mention others as well—although reasonably substantial are not as substantial as the rolling tiers of anomaly that one creates by aiming at any situation which does not achieve simple equality. The answer to the basic problem that he outlined, that perceived discrimination depends on where you stand, is ultimately that of treating people as equals and of making special allowances to people in special circumstances and notably to persons with families.
In The Sunday Press of 26 March shortly after the Minister's Dún Laoghaire speech, some of the problems about the Minister's solution were raised in an article by William O'Dea, lecturer on law and taxation. Mr. O'Dea incidentally was also under the impression that income splitting was about to be introduced in the Finance Bill. He argued, if I may quote, that:
... the Minister's proposals will, if implemented, discriminate further against unmarried income earners——
this is another of the anomalies I have talked about
—The fact that the unmarried earner is already discriminated against under our income tax laws does not provide its own justification and this proposal to increase the discrimination against unmarried income earners surely calls for some explanation.
If it is felt that married workers, for example, should be paid substantially more than unmarried workers who do precisely the same job, then this should be done simply by introducing substantially different salaries for the same work according as to whether it is done by a married person or a single person.
If this were proposed openly,—— so he says and I think he is right
—I am sure that it would run into a great deal of difficulty and would be extremely hard to justify. Yet it is being done, in substance, through the back door.
Finally, it may be asked how the Minister's plan is going to be financed. If it is to be financed through increased taxation then part of the benefit to married people will be claimed back and the single income earner will be further punished.
If it is to be financed by increasing tax on the self-employed then these will presumably have to be taxed at higher rates than others. This is discriminatory and anyway would be in direct contravention of the stated intention of the government to rely on and encourage private enterprise as the main vehicle of economic growth.
These are serious and reasoned criticisms of the direction the Minister is taking aimed at reaching a situation in which some kind of income-splitting arrangement were to be created, an income-splitting arrangement—and this might be emphasised—which still does not concede any right to a married person to be taxed on his or her own income. I should like the Minister to comment, first, on the informational side of the thing; secondly on the specific fact that this is merely window dressing but a little bit more than that in a negative sense which I hope to mention in a moment; and, thirdly, on the very reasonable criticisms of his plan made by this lecturer. I wonder what kind of response the Revenue Commissioners' circular will have in 99,000 Irish households—I presume all of them will get it. It is putting up, in this scheme as it is being presented to us here, to a married couple the option of a situation in which the wife will be given more money in her pocket and the husband will be given less in his.
If the Minister were really serious about this, instead of making it an option, he would make it mandatory. As it stands, and if he made it mandatory, he would achieve this internal income transfer in the family or between married couples who may or may not have a family—that is a separate problem—if he believes it to be important and a step towards equality without causing any bad blood in the family. As it is, if it remains an option, the Minister is creating a situation in which this may very well damage some marriage relationships. I believe this is something the Minister has failed to take into account. There is even the possibility that husbands whose wives opt for separate assessment under these circumstances and who find themselves with a lower take-home pay as a result may take such steps as are open to them to persuade their working wives to cease working and stay at home so that in certain circumstances their former personal take home pay might be restored. This might be true in situations in which the husband's income greatly exceeds that of his wife. It is an odd way of solving our unemployment problem and certainly it does nothing for family relationships.