I heard here this morning a number of excellent speeches on both sides of the House. I am glad to say I heard the Minister reply to them.
The Minister for Finance is an able man but he found himself today in the unenviable situation that, able and all as he is, neither he nor anyone else could defend the indefensible. The points that have been made simply have not been answered.
This tax is ill-conceived, it is idiotic and inequitable and has been proved to be all of those things. If by any chance it is passed through this and the other House, there is no question but that it will be challenged in the High Court and the Supreme Court at a very early stage. While one hesitates to make any definitive forecasts about the outcome of cases, I would be very surprised if this tax is not found to be unconstitutional on more than one ground. If one applies the principles that the Supreme Court, for examciple, applied in the Murphy case, clearly it breaches the principles that the Supreme Court laid down in Murphy. You have the same old thing again that we were supposed to have got rid of, that it pays a couple financially to live together but not to get married. Of course they benefit clearly from this and the Supreme Court presumably will set that aside because it will be found to be discriminatory against couples who are married. If you like, that is only one of the minor side issues; it is not one of the fundamental effects of this whole provision. There are so many glaring inequities which will be found to be discriminatory as between citizens that the prospects of this tax surviving any length of time are fairly negligible.
The more obvious anomalies and inequities have been referred to in a succession of speeches here today. I am sure, if we had the time to go through it all and analyse it line by line, we would find there is a ludicrously long definition of "owner" and references to rents over and above a certain level. One could spend hours speaking on the sorts of anomalies that could arise.
Deputy O'Dea asked a short, straightforward question to which he did not receive a reply. The Minister waffled on about other things. The reason Deputy O'Dea did not receive an answer is that he is right. The definition of "income" is gross income, except with the most limited number of deductions. Deputy O'Dea gave the example of a sole trader who carries on to two separate businesses, making £25,000 on one and losing £20,000 on the other. His income is £5,000 a year but for the purpose of this tax his income is £25,000 a year because that is the gross figure and therefore he is liable, although presumably it is not the intention that someone earning only £5,000 a year would be liable.
Most of the debate concentrated on the anomalies which exist on the capital side but there are enormous anomalies on the income side also. The Chinese concept of the extended family has been introduced, to the detriment of the family. If someone, as is quite common in this country, were to make provision for his mother or mother-in-law and bring her to live with his family, the family could be caught for this tax if she had an income of about £5,000 as a result, say, of the death of her husband. The obvious remedy is to ask the mother or mother-in-law to depart to the county home or somewhere else where she will be a burden on the State because by kicking her out the family will save the tax on the dwelling.
The gross income of minor children is also aggregated and one might have a child who had been left some property by a grandparent or an uncle and who derived some income from that property. What should one do with that child? Is the child to be kicked out of the house? On a strict reading, even if that were done the income would still be aggregated for the purpose of this tax.
What view will the High Court or the Supreme Court take of this ridiculous tax which has been cobbled together for the worst of reasons, not, as Deputy Kelly rightly says, because it will work or because anyone thinks it will work but because it is politically and ideologically necessary as a sop to the Labour Party. Members of that party will make the kind of speech we heard from Deputy Taylor when he talked in a grandiose way about how great it is to have a tax on big houses. People who have not studied the Bill or studied some of the commentaries on it think there is something basically equitable about this tax. I have read some of the commentaries by tax experts. They tend to express themselves in rather cold and rational terms but even such men are carried away in wonder at the nonsense that pervades this part of the Bill.
The Minister does not fully understand the significance of the argument he tries to make when he equates the unencumbered fee simple with any other kind of title. The definition of "ownership" refers to a lease, the duration of which is 50 years or more. Forty-nine of those years may be expired. How can one compare the value of a house held under a lease with one year to go and a similar house with an unencumbered fee simple, which means that it is owned forever? How can it be said that both houses have the same value? Does the Minister or any Member of this House seriously think that the Supreme Court will approve of this tax when under this fictional notional system two houses of the kind I have mentioned will have the same value for the purposes of this tax? The Supreme Court will laugh that out in two hours; it will not get even to lunch time on the first day. Still we have to go through this procedure and enact this nonsense.
It is easy to challenge people on the other side and ask them to put their feet where their mouths are. They should seriously think about this point. It will be politically embarrassing for them, whichever way it goes. They can either enact it, against their clearly and eloquently expressed better judgment, and wait for the Supreme Court to tear it to shreds, or they can put a stop to the nonsense now and tell the Minister to produce some workable equitable tax that bears some relation to reality. They may not want to vote against this measure but I would ask those who have spoken and others who know this tax is farcical to consider abstaining.
Deputy O'Kennedy made the point that when a totally new system of taxation is introduced it is brought in by way of a special Bill preceded by a White Paper and the principles of it are argued at length. The famous turnover tax in 1963 was argued at tremendous length until Members of this House were blue in the face and value-added tax, although not a fundamentally new tax because it was really a European adaptation of our old turnover tax, was introduced by way of a White Paper and a special Bill in 1972 and debated in great detail. The whole principle of it was discussed throughout the country for a year or two before it was brought in, but here we have a totally new tax dreamed up under pressure — and not in the Gaiety this time. I think this emanates from the Savoy in Limerick.