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Seanad Éireann debate -
Friday, 20 Jun 1930

Vol. 13 No. 27

Finance Bill, 1930—Second Stage.

Question proposed: "That the Finance Bill, 1930, be read a Second Time."

I think as a farmer that this Bill should contain some provision relieving farmers of the enormous burden of rates. I had hoped that the Minister would, at least, have made some provision in it to relieve farmers of the upkeep of main and trunk roads, as well as the maintenance of mental hospitals. Nothing is being done in that direction. A Commission is sitting inquiring into de-rating of agricultural land as a means of relieving farmers, but I had hoped that the Minister would have made a start and given some relief this year. As the De-rating Commission is sitting I will not touch on that matter now. I would like to call attention to the question of income tax on occupied agricultural land. It is a great source of worry, trouble, and expense to farmers, and on the Committee Stage of this Bill I intend to suggest recommendations that, I hope, the Minister will see his way to accept, to exclude from income tax all profits derived from the occupation of agricultural land. The question of farmers' income tax was fully debated in a discussion that took place in this House on the Finance Bill of 1928, and from statements that were made, the Seanad was perfectly convinced that it was waste of both time and money to be sending demands for income tax to farmers. The Minister then stated:—

A discussion like that as regards farmers' income tax is really a case of much ado about nothing, because if we exclude from our consideration farmers who have other sources of income besides what they derive from farming, and deal only with farmers who make their living out of the land and whose sole income is derived from farming, the amount of income tax paid by all such farmers in the Free State would not cover the cost of the electric light for the Dáil and Seanad.

In view of that statement, is it not time that farmers were relieved of the worry and annoyance of having to fill up income tax forms? As the Minister knows perfectly well, farmers are not the best of accountants. When they receive official documents they have a terror of them and will not attempt to fill up the forms without going to an income tax expert. The fees of these experts are very high and, in a great many cases, are more than the amount of the demand for income tax. I am not concerned with farmers who have other sources of income. My recommendations will be to the effect that income tax on farmers as such should be completely wiped out. Possibly the Minister will say that 50 or 60 per cent. of the farmers get no demand notes for income tax, but I know cases where farmers who on their valuation and annuities are not entitled to be assessed constantly get demand notes. I could quote the case of a farmer who has been assessed for income tax and for arrears who got a final demand which he ignored, until eventually the inspector sent down bailiffs to distrain on his stock. Then he woke up, went to a solicitor who employed an income tax expert, and as a result of an interview with the inspector the demand was wiped out, but it cost the farmer £40. I admit that was the farmer's own fault. However, a good many farmers who ignore these demand notes have eventually to go to the income tax experts in order to have the matter fixed up. Income tax demand notes are a source of worry, annoyance and expense to farmers. I appeal to the Minister to wipe out demands for income tax on land that is purely agricultural land. He can do that this year without entailing any loss to the State in view of the statement he made in 1928, and I think the Minister will agree that the condition of farmers has not improved since then.

I have a great deal of sympathy with what the last speaker has said. I think it is recognised by all economists that all taxes eventually fall on agriculture. Agriculture supports the nation, and the nation sits on top of the agriculturist, and everybody else is to a certain extent a parasite on agriculture. That being generally acknowledged to be the case, it is natural that the agriculturist is not able to pay the taxes the parasite is able to pay. Having regard to the Minister's own statement that the amount collected in income tax from the farmers would not pay for the electric light in the Dáil and Seanad, I wonder why he pursues the matter at all, except as a matter of theory, and I admit that as a matter of theory everybody ought to be charged some tax. I sympathise with the idea underlying the claim made by the last speaker, and I would go as far as it is possible to go in that direction.

Another matter to which I wish to refer is, that clergymen of all creeds are charged income tax on gratuities they receive from friends. These gratuities could not be in any way called part of a person's income, because it is not what he earns exactly. He does not get a gratuity as a matter of wages or anything of that sort. I do not see why that money should be charged income tax merely because one man chooses to give it as a gift to another. If I was foolish enough to hand over £100 to a Senator, would he be charged income tax on that?

He would if he got it as a Senator.

Yes, if he got it because of his position.

It might not be given to him because he is a Senator, but because he is a friend of mine, and the clergymen are the friends of the people. However, I do not wish to enter into details, but I hope there will be a change as regards that matter.

I wonder what is the practice in the legal profession regarding honorariums or retaining fees. Are they not more in the nature of gifts from a solicitor and his client to counsel, and would they come within the same category?

They are taxed to the hilt.

I was interested to hear Senator Counihan's statement, partly because it seemed to run diametrically opposite to a statement made by Senator Wilson a couple of days ago, that the agricultural community paid 65 to 70 per cent. of the total taxation, and he threw out that, as he might be justified in doing in a kind of way, as a more or less accepted fact. The Minister for Agriculture has said the same thing in the country, and the leaders of Fianna Fáil have said it in writing and speeches, and it seems to me that it is going to become current belief unless it is quite definitely proved to be fallacious that the agricultural community, because they produce round about 65 to 70 per cent. of the productive wealth of the country that they bear 65 to 70 per cent. of the total taxation. I do not know what is the basis of the statement, but I think it is so general at the present time it is worth while examining it. If it is stated that because agriculture produces 65 per cent. of the total wealth production, and, therefore, bears that percentage of the taxation, then the other 30 to 35 per cent. of the total production is produced by another five per cent. or six per cent. of the total productively occupied persons in the country, and the lawyers, administrators, politicians, commercial men, assurance men, bankers and the rest do not bear any taxation at all. I do not think that conclusion can be justified.

If that is not the basis of the statement, and if there is a real belief that the agricultural community comprising the big majority of the population bears taxation proportionate to its numbers, then I think that should be examined. I find that for the last three or four years the tax revenue of the country has been about £20,500,000 or £21,000,000, and that is more or less the expectation under this present Bill. There has been a reduction, of course, since 1923-4 of the amount raised by taxation. I am wondering whether the agricultural community will acknowledge that they have received the benefit of 70 per cent. of that reduction. That is to say, there has been a reduction of about £5,000,000 in the tax revenue since 1923-4, do the agriculturists acknowledge they have had 70 per cent. of the benefit of that reduction? Of the total tax revenue almost exactly half is derived from the duties on beer, spirits and tobacco. I assume, for the purpose of argument, that the agricultural community, man for man and woman for woman, consume as much tobacco and beer and spirits as the urban community. I think that is an over-estimate, but for the sake of argument we will assume that it is correct. Therefore, they would pay that proportion of the revenue that is derived from those taxes. The agricultural population, shall I say the farming population, strictly meaning all those people living in farmers' houses and living in farm labourers' houses, is almost exactly half the population of the country. That is the figure which most of the speakers relied upon and took their cue from. The agricultural output report shows that there is 61 per cent. of the population living in the rural part of the country. Taking that 61 per cent. rather than the actual 50 per cent., which is the true figure, it would seem to me that the drink and tobacco taxation paid by the agricultural community accounts for £6,450,000. I do not know what percentage of estate duty tax might be said to fall on the agricultural community. I am giving them credit for 75 per cent. That amounts to £774,000.

According to Senator Counihan, the agricultural community pays no income tax. I am giving them credit for 10 per cent. If 10 per cent. is accepted it amounts to about £500,000. Therefore, we have the amount of tax revenue derived from the agricultural community on that rather generous estimate of 6½ millions out of 21 million pounds, or about 31 per cent. of the total. That figure is against the figure quoted by the Minister for Agriculture, by Senator Wilson and by leaders of Fianna Fáil of two-thirds or three-quarters of the total taxes of the country falling upon agriculture. I make the counter assertion, which I think can be justified, that not more than 30 per cent. and probably not more than 25 per cent., of the total tax revenue of the country is drawn from the agricultural community. That is quite apart from the question as to how the community lives or from what source it derives its means of existence. That is an entirely different proposition from the question of who pays the taxes. If one is going to take the argument that because agriculture is the basic producing element within the community and there is another small minority, five or six per cent., of the occupied people engaged in other kinds of production, we may say that the whole taxation of the country is borne by that comparatively small minority of the country which is engaged in production. In dealing with taxation and the incidence of taxation, I do not think that one could take that particular method of calculation.

I am disappointed with the Budget and with the Finance Bill for one very big reason, and that is that there is no change in the incidence of this main taxation. The method that has been adopted during the last three or four years of giving relief to the larger income taxpayers is being continued while no relief is being given to the smaller income taxpayers and to those who bear indirect taxes. In 1927, I think, the Minister in introducing his Budget, which contained a considerable reduction in the income tax rate to 3s. in the £, made the statement that he believed it would have the effect of stimulating industrial activity and encouraging new industrial enterprise. I ventured the prophecy then that the saving would be mainly spent on the ordinary requirements of life and not invested in productive enterprise.

I wonder is the Minister in a position to say to-day what has been the effect upon industry, particularly new industry or upon industrial development, as a result of this relief from taxation by the reduction to a 3/- rate. If the Minister can show that it has been a direct incentive to new industrial enterprise, then I think he can justify himself, but in the absence of that I do not think the reduction can be justified at all. We pointed out last year that the liability for income tax fell much heavier, even at the 3/- rate in the Free State, than it did in Great Britain and Northern Ireland under the higher rate of income tax that was then in operation. There has been a change in the income tax rate in Great Britain and Northern Ireland, nominally an increase, but for the lower incomes there has been, in fact, a decrease in Northern Ireland and Great Britain. From the difference between the taxes borne by the smaller income taxpayers under this Bill and under the Budget scheme of the British Minister it will be seen that the lower income taxpayers are much worse off in this country than in Great Britain. I cannot say at present how much the difference is, but even under the scheme of last year a man in Great Britain with an earned income of £600 having a family of three children paid a sum of £11 10s., whereas in the Free State he would have paid £16 17s. 6d. Under the new scheme in Great Britain the difference in favour of the resident in Northern Ireland will be greater still. There is another point in this Bill covered by Section 19 to which I desire to extend some criticism. That section deals with the Post Office Savings Bank accounts. It is proposed in that section that any excess in the funds from year to year accruing from the interest on investments of the fund, over and above the amount paid in interest to the depositors, is to be paid into the Exchequer. That means to say that when the depositors are receiving 2½ per cent. the fund is earning 5 per cent. It is intended that having paid the administrative expenses the balance should be paid into the Exchequer.

Under this Post Office Savings Bank scheme, which was initiated by the British authorities years ago, 2½ per cent. was promised to depositors. and that rate has been continued by the Free State. When the fund was initiated 2½ per cent. was the amount that could be and was earned out of the investments of the Post Office Savings Bank fund, and there was practically no intention of making a profit for the State on that banking transaction. The Minister now proposes that this scheme shall be the means of raising revenue; that is to say, that the small depositors are to be paid interest at the rate of 2½ per cent., while the earnings of the fund are expected to be, and no doubt will be, at the rate of 5 per cent. or more, the balance to be paid into the Exchequer. I think the Post Office Savings Bank ought to be encouraged and developed. I think that encouragement and development might be achieved by raising the rate of interest on these small deposits rather than by grabbing that advantage for the sake of the Exchequer. The sums, undoubtedly, are not very great at present. I think they might be made very much greater if there was a real encouragement given to the Post Office Savings Bank. The interest on securities held by the Minister is shown to amount to £154,309. The expenses of administration are put down at £26,685, leaving a sum of £127,624. The amount left in hands, after paying out interest to the depositors, is £70,000, leaving enough to pay another 2 per cent. to depositors.

I do not think it is good policy to use the Post Office Savings Bank in this way. I would urge that this proposal in the Bill should be deleted and that consideration should be given as to whether or not the Post Office Savings Bank should not be very greatly extended, its extension to be encouraged by offering a higher rate of interest on these small deposits. It is much easier and more convenient for the small depositor to use the Savings Bank than even Savings Certificates. I think that the State ought not to crab the Post Office Savings Bank, and that in fact it should change its policy by increasing the inducements to small depositors to use the Savings Bank system. The proposal in the Bill to use it as a profit-making enterprise, on the part of the State, should be dropped.

As this is about the only opportunity one will get to make suggestions in connection with the Finance Bill, I should like to call the attention of the Minister to a matter which has a very injurious effect in the creating of investments in this country, and that is the great delay that takes place in the payment of reclaims for income tax. I am in the unfortunate position of acting as trustee in some small cases. There is one case which comes to my mind at the moment where the repayments claimed have accumulated for something like six years. I think they were made up to about three years ago, and during all that time payment was denied. In connection with the same estate, claims for repayment were made to the British, in their time, and were met by the British Commissioners. Of course, that was several years ago. When a question arises as to the reinvestment of funds here, I am at once met with the comment: "If we invest our money in Irish securities the delay is so great in connection with claims for repayment of income tax, that it is simply not worth it," and consequently, preference is given to English securities. I do not think it is for the benefit of the country, in addition to the hardships inflicted on the people concerned, that these claims should be put off by one form of excuse or another for years and years. I think it would be well worth the Minister's while, in consultation with his officials, to devise some method by which the repayment of these claims could be expedited.

I am bound to say that in this matter my experience has been exactly the opposite to that of Senator Barrington. I always had great difficulty in getting back repayments from the British Treasury, but the Free State Department of Finance has always treated me with very great expedition.

I would like to ask the Minister to consider the question of farmers' income tax. Everybody liable for income tax ought to pay, and there are, of course, farmers in this country who are liable to income tax, and who ought to pay it. I am not sure that it would be fair, or right, to provide that no farmer is to be assessed for income tax. But we know that the great majority of farmers are not liable to income tax. Those who are the owners of their own little farms, and because they are assessed under Schedules A and B, have to pay on their valuation, and they have to get that back, if they are not liable to income tax by reason of not having any income after allowances are deducted.

I suggest to the Minister that he would relieve a very large number of the farmers—indeed, the great majority of the farmers in this country— from the trouble of getting back their income tax, and making the returns are extremely difficult for the farmer, and he would also relieve a very large number of his own officials from the trouble of dealing with those claims if there was a rule, or, if necessary, legislation, providing that the farmer whose valuation is under a certain amount—let it be £30 or £50 or whatever would be the fair amount in the judgment of the Minister—would not be liable to income tax. If the Minister did that he would confer a very great benefit on the farmers and he would very greatly relieve his own department from an amount of unnecessary trouble.

One word more about the suggestion of Senator Moore to relieve clergymen, and taxpayers of that kind, from income tax on what they get in the form of what are called presents. This is a very difficult matter to deal with. As the law stands a present or a tip is liable to income tax, because the person who gets it is in a certain position or is a member of a certain profession.

The ordinary case fought in the courts was the case of the jockey. He is only entitled to a very small fee, three guineas or five guineas—Senator Sir Walter Nugent could tell us about that—but we know that the jockey when he wins a race or gets a place gets an enormous tip from the owner of the horse, but he does not get it because he is a friend; he gets it because he is a jockey. If a person gets a gift because he is a friend he does not pay income tax upon it. But if he gets it because of his business or by reason of his position and not as a friend, he does pay income tax.

Cathaoirleach

Perhaps the House would allow me to make one or two suggestions from the farmers' point of view. As I understand the Act, if you are assessed under it and do not appeal you render yourself liable for income tax. There are a number of the small farmers throughout the country who get assessments and do not appeal, and that renders them liable. That puts the farmer into a very onerous position. He has to make a claim and fight it. To my mind, it is a very unjust burden to place upon the farmer, especially when the income tax authorities ought to know very well he is not liable.

If something in the nature of the suggestion made by Senator Samuel Brown were put into effect, or even if they were publicly informed that they were not liable to tax, but that their failure to acknowledge a demand or an assessment made against them renders them liable for the payment, I think you would have a certain difficulty removed and remedied. If the farmers are not aware of these facts they ought to be made aware of them. To conceal these facts from the farmers is an injustice. If an assessment makes a farmer liable, then an assessment made against a man who everybody knows is not liable is a gross injustice and it ought to be remedied.

I should like to say one word about this matter. There seems to be very few people who have a good word to say about the Finance Department, and about people in the Revenue Department particularly. My view is that the people themselves bring a good deal of trouble on themselves in this matter of income tax. I have had experience twice in my lifetime of getting demands for income tax. On each occasion on which the demand was made I went to the collector and I told him that my income did not warrant my paying income tax. He gave me some forms and I filled up those forms in the way that was required. The first time on which a demand was made on me was in 1912. I was then secretary of a health insurance society, and they thought we were being paid fabulous salaries. However, when I satisfied the income tax authorities that I had not sufficient income, that settled the matter and I was not bothered again for years. The next occasion on which a demand was made on me was shortly after I was elected to the Seanad. I then went to the Revenue authorities and pointed out that I had not any income at all—that the amount of allowance I got was not subject to income tax. I was never bothered since.

I have had experience of several workers, artisans and working class people of that type and of the demands made on them about income tax. I think most of these people bring the trouble on themselves. I have in mind the employees of a well known company in the City of Dublin who were served with demand notices for the payment of income tax. Several of these employees came to me and I filled up the forms for them and sent them in. They were never troubled afterwards. Others of the employees took no notice of the demand notes or assessments. The result was that these people, who, under the law, were not bound to pay income tax, became liable for income tax because of their neglect or refusal to acquaint the Revenue authorities of their actual financial position. These people subsequently found that the Revenue authorities made a demand on their employers to deduct from their wages the amounts for which they were assessed. This all arose because they would not go to the bother of filling up and returning the inquiry forms sent them or making the least inquiry about the matter.

I am satisfied in the case of certain small farmers in the country that these are not liable or likely to become liable to pay income tax. That is quite evident. I am satisfied that if these people went to the local Revenue authorities and explained the position, the Revenue Commissioners would not be wasting time in making the demand. I do not think the Revenue Commissioners could adopt the suggestion made. Senator Brown suggested that farmers with a certain valuation should not be assessed for income tax. It is not a question of valuation. A man might have a certain small valuation and yet be a very wealthy man, and another man with a bigger valuation might have nothing at all. It is not the valuation of the farm but the financial position of the man or woman in the farm that really matters. I quite agree that a good deal of vexation has been caused by the manner in which this thing has been done. I am quite satisfied from my own experience that if the community, as a whole, would not look on the Revenue authorities as being their eternal enemies, but would remember that these people are employed by the State to carry out the law as laid down by the Oireachtas, things would be more satisfactory. These men have no option but to carry out their duties.

I am satisfied that in the majority of cases if these people on receipt of the demand would take up the matter in a proper way with the Revenue authorities and treat the Revenue authorities in the proper spirit that a good deal of this trouble and annoyance would be avoided. The time of the farmers themselves would be saved in addition to the time of the Revenue officers. While I say that, of course I know that there are cases in which mistakes will occur, but in general the people would be saved all this worry that they complain of if they attend to the forms, fill them up and return them.

In regard to the general question of finance, I notice that Senator Johnson made some reference to the question of income tax. I have a recollection a few years ago when the Minister was so good as to come to the House and announce a reduction of income tax, that I heard a lot of people here get up and congratulate him and his Government on their boldness. We understood then from all the financiers that the result was going to be that this was going to become a land flowing with milk and honey. Great industrialists were going to flock into this country because of the reduction in income tax. I must say that I have not seen much results as a consequence of that reduction. What happened was that the tax was taken off at the top and put on at the bottom. For every stitch of clothing that many of the people wear they are paying an import tax and the people who are paying this import tax are the people at the bottom of the social scale, the people who cannot afford to pay it.

Personally, I think that the people are foolish to be paying import duties on goods. Perhaps it serves them right. If the people were a little more patriotic and, I would add, a little more businesslike they would get all the clothing and footwear they require made in this country. They could do that if they only exercised a little discrimination in their purchases. They could wear material made in this country and get as good and better value than they are getting through the purchase of imported articles. I think it is a pity that in this state of our existence so much money is sent out of the country for articles made abroad to the loss of employment as well as to the loss of capital here.

[Mr. Counihan took the Chair.]

I find myself in agreement with the suggestion made by Senator Brown. I know that everybody who is farming or who is in any way connected with farming will agree with that suggestion. I feel with Senator Brown that if some broad rule such as he suggests were brought into force it would be a great relief to that class in the community. I know that it is quite impossible for the tenant farmers in the country, in most cases, to put machinery to work so as to secure such revision as they are entitled to in the matter of assessments. I am quite confident that what Senator Brown suggests would meet the situation. It has often been said that the Revenue Department always loses a good deal of money which they ought to get. I am sure, however, that they get a good deal of money which they ought not to get. I think anybody engaged in farming or anybody who holds land always suffers more and is worse treated than any other class in the community.

Even if one is in a position that one can make the best of his affairs, still it is a difficult and complicated matter to fill these forms. Senator Farren's suggestion is that the small farmer should fill up this form when he gets it. I suggest that in most cases that is impossible. The only way in which relief or protection can be given to such men would be by adopting the suggestion as to valuation. The man who owns a little bit of land should not have these demands sent him. The man who is a grocer or shopkeeper is in a very different position altogether. What Senator Brown refers to, and I agree with him, are the cases in the country of men with a valuation under £30 or £40 who have no other means of living and who are practically illiterate. It is to meet cases of that kind that I welcome so much the suggestion made by Senator Brown.

I would like to support the suggestion which Senator Brown has made in this matter. In the county in which I live there is a large number of small, industrious farmers. To suggest, as Senator Farren has suggested, that they should, perhaps in the middle of their work, come into the nearest town, hunt up the Revenue Officers or income tax collectors, and fill up forms about which they do not know anything, is to ask them to do something which would be an absolute impossibility. I think that anything that could be done by the Government, even if it were only a gesture thrown out to the farmers, would be very helpful. The farmers have got the idea and, of course, fairly rightly, that they are down-trodden. Many of the lives of the small farmers are very hard indeed. If anything could be done to relieve them even of the irritation of getting these forms and having to fill them up, it would be some concession, and I think that it would be a good thing if the Government made some gesture in that direction.

There are other cases in which the Revenue authorities are involved and which also cause a good deal of hardship. One ease which came under my notice the Minister for Finance has already dealt with. It is an illustration of what happens sometimes in regard to the collection of taxes from farmers. A very small farmer who owns 11 acres and who appeared to be a very industrious man and an honest man, as far as I know him, came to me in great difficulty. He stated that he had got a demand for legacy duty on a sum of £300 which he had inherited eight years ago. He told me, and I have no doubt that he was stating the truth, that that was the first time that he had received the demand. The Revenue Commissioners, of course, said that they had made a number of demands upon him. If he had to pay £20 now it would be a very great hardship indeed. That is an illustration of what happens sometimes. I do not say that the man should not pay the £20, and if he had known that there was such a demand he would have paid it at the time he inherited the money, I am sure. Such things as these irritate the small farmers very much and if anything could be done to make their lot less burthensome it would be a good thing.

We were greatly edified to hear Senator Farren refer in glowing terms to the officers of the Revenue Department. Before I make any criticism of them I will say that I agree with Senator Farren that they have a great tradition for efficiency. I think the officers of the Revenue Department in Ireland are upholding that tradition. I would say, from some matters that have come under my notice, that they are doing their business with perfectly ruthless impartiality, or, I might say, with perfectly impartial ruthlessness, one way or the other. There were some matters to which I intended to refer in the debate on this Bill but so many interesting things have been said in the course of the debate that I think I will deal with them first. Senator Colonel Moore said that clergymen of all denominations should not be taxed. He gives as the reason, which I think is a sound reason, that the donations given to priests are really in the nature of charity. They are charitable donations, and in that way Senator Brown's argument is the weakest I ever heard from him. He makes a comparison between the charitable donations given to a priest and the reward for work and labour which is given to a jockey. I do not think there is any comparison at all between these two occupations. There is no comparison whatever between the remuneration in the one case and the remuneration in the other. No doubt Senator Brown is right in saying that it would be very difficult for the Revenue Department to formulate sections to deal with a matter of this kind. I can assure him, however, from what I know of the Revenue Department that difficulties do not appal them and I repeat that they are a thoroughly efficient Department, though ruthless and impartial.

There is the other matter which was referred to by Senator Brown and in which I take the opportunity of heartily concurring with him. That is in relation to the income tax assessments on small farmers. I think that is a matter which the Revenue Department could quite easily arrange. They have in their files evidence which would show to the last penny how much they are justly entitled to from farmers of a certain valuation. Therefore, I think that a valuation could be fixed below which there would be no loss of revenue by ceasing to send out these assessment forms. I happen to know that the Revenue authorities have material for the most exact calculations. We are accustomed sometimes here to mention private matters. I might say that Revenue work, until I was twenty-five years of age, was my own profession and I know exactly what I am talking about in matters of taxation and kindred questions.

Was it then a ruthless department ?

They were in the old days perfectly ruthless but perfectly impartial.

You must have got a good training.

Yes, that is the reason I am so good now. I was greatly surprised that Senator Farren in the course of his little discourse was so ruthless on the small farmers.

I said nothing against the small farmers.

Oh, yes, the Senator said this against the small farmers: He said: "Let the farmers be assessed, let them go in to the Revenue officer to explain their case, and if they do not come to the Revenue officer, then why should they not pay?"

I did not say that.

Oh, very nearly.

That is the lawyer's way of doing it.

I think that is most unjust to the small farmer. I make this charge now, that the Revenue authorities know perfectly well that by this system they are getting revenue to which they are not justly entitled according to law. When my friend Senator Sir Walter Nugent, says that they would lose some revenue, my answer is that they will lose no revenue to which they are justly entitled. These are two of the matters to which I would like to refer, before going into the main subject which I wish to bring before the Seanad and the Minister to-day.

Senator Johnson seems to think that the farmers and the farm labourers of Ireland ought to be very thankful because there were remissions of war taxation in the years 1922 and 1923, and therefore that the farmers and farm labourers should be bled white. Now I propose to show, as concisely as I can, that the agricultural industry is treated in this measure with great severity. Deputy Johnson said that the indirect taxation on beer, spirits and tobacco amounts to 50 per cent. In that I think he is right, but there are other items of indirect taxation. He then said that we are quite wrong in supposing that 61 per cent. of this indirect taxation is paid by the farmers and farm labourers. Further, he makes the gratuitous statement on his own authority and, as I think, out of the recesses of his imagination, that the agricultural industry pays only 30 per cent. of that.

Of the total tax revenue, less than 30 per cent.

[An Cathaoirleach resumed the Chair.]

I submit that he has got that fact from his imagination, because he cannot have got it from any other source. Has it ever occurred to him that as agriculture is the main industry of this country and, as the Germans have often said, the only industry in any country, every other industry being subsidiary, it is the industry that ultimately pays for all? That, however, is only by way of preface to some observations which I mean to address to the Minister for Finance. Tariffs have recently been imposed. I am in favour of them and of increasing them to a much larger extent than at present, but the Minister and his Department have not adopted the measures necessary to make tariffs a success because they have collected in the last twelve months between one and one and a half millions from tariffs, and that money has been paid by the farmers and farm labourers of Ireland to the extent, as I venture to allege, of between 60 and 75 per cent. The Minister has used that money for the ordinary purposes of revenue and has given no remission of any kind to the agricultural industry to make up for these indirect taxes which he has collected.

Let my friend take the case of tea, or sugar, if he likes. I say that there should be no tax on tea or sugar.

No tax on anything.

There must be taxes and there must be a fair balance between direct and indirect taxation. Indirect taxes are high enough; there might be some remissions. It may be said: "Here is a man who is making objections but who does not suggest a remedy." I suggest a remedy. I suggest that the tariffs in existence ought to be continued and there ought to be a definite promise—in fact, a perfect certainty—of their continuance. I say that tariffs should be increased still further. Then how do I propose to give remission to farmers, farm labourers and workers in towns, who are the persons to pay?

De-rate them.

My friends on the Labour Benches ought not to interrupt. They ought to listen and if they have an answer they can give it. When you continue the customs duties, as you ought to continue them, and put on greater duties, as you ought to do, you ought to give remission on other duties to a corresponding amount. The remission I suggest is this: There ought to be remission of duties on those commodities which are consumed by the very poor, whether farmers or farm labourers. I suggest that there ought to be remission on common kinds of tobacco. Has my friend any objection to that? I understand that from tobacco in this country there is collected revenue amounting to between three and three and a half millions. I have not at my disposal means of ascertaining the amount of revenue collected from common tobacco used by farmers and farm labourers, but I would say that it would come to something between one and one and a half millions. That would be my guess as to what the farmers and farm labourers pay by smoking common tobacco. I suggest that there ought to be a reduction in the duties on common tobacco. I do so for another reason—namely, because I am in favour of these tariffs, I do not want to have opposition to them springing up in the country. If you give remission on tobacco and other commodities which are necessities for the poor, whether labourers or farmers, you will be able to go on with the tariff system with the assurance that you can continue the tariffs with the full consent of the people. It is the first time that I have heard from Senator Farren a sort of hostility to the small farming community.

I never said anything of the kind.

I am very glad that my friend disclaims it.

I never said anything of the kind.

I accept that.

It is not the first occasion on which the Senator suggested that I said it.

I withdraw what I said now, knowing that the Senator has repudiated it, and if I said it on any former occasion I now make a retrospective withdrawal and am glad to be in a position to do so. I would have expected that we would have got the enthusiastic support of Labour Senators for any relief that could possibly be given to the small farming community.

The last speaker is generally very amusing and illuminating as to the policy of his Party, and one is now more than ever impressed in view of the confidence he expressed yesterday that in a short time he will be——

I spoke for myself. I never purported to speak for anyone else.

I do not suggest that the Senator speaks for his Party if he now repudiates it.

Has my friend any Party?

No. The object of my remarks is not to arouse the ire of Senator Comyn but to suggest that it is difficult for us to understand what is his protectionist policy. We understand from the Senator that we are going to increase duties even further than they are increased in this Bill and that if we do that we are going to benefit the small farmer. The benefit which he will get will not, however, help industry, but there is going to be an increase in revenue.

As a matter of explanation, I did not say that tariffs were to be introduced for the benefit of small farmers. I said that they were to be introduced for the benefit of industry, but that there would be a corresponding remission of duty in order to relieve the small farmer of what he would have to pay as a result of tariffs.

Cathaoirleach

Senator Douglas is trying to interpret what you said, and unless he says something in conflict with what you said he should be allowed to proceed.

He has said something which is directly in conflict with what I said, and I am trying to correct it.

What I would suggest is that the Senator is in favour of a drastic increase in tariffs, and the small farmer is to benefit by these tariffs principally by a reduction in the price of the tobacco which the small farmer smokes, and in other ways. We know from the last statement of the Senator that industry also is to benefit. How industry is going to benefit if the new duties bring in such large sums of money as the Senator anticipates, and if there is to be a reduction in the price of tobacco and reductions in other ways which will benefit the small farmer, is beyond my comprehension. I would really like to know how it could be done. If tariffs are going to bring in a certain amount of money, as the Senator suggests, surely that amount will steadily decrease because of the assistance that will have to be given to industry, and then it seems probable that you will not be able to take off the duty on tobacco to the extent desired, or give reductions in other ways that will benefit small farmers; if you do, there is bound to be a fiasco. I do not think that in that manner you will benefit industry in any way if you are going to give the benefits to small farmers in the way of the compensation which the Senator suggests.

I am glad that Senator Farren made the statement he did make with regard to small income taxpayers. I know perfectly well that it does not meet every case. I think there is an impression abroad that because a man gets an income tax demand he has a grievance. As far as the people in the cities are concerned, they have a remedy and it is easily dealt with. I think it would be well if the societies which abound in cities, or employers, would inform employees that if they get demands for income tax they should bring those demands to them and they would tell them what to do. In the case of the firms that I am connected with, that is always done, and I have never known a case of any great difficulty. Further, when adjustments are made, it is very rarely that a person receives a further demand unless there is reasonable evidence that that person has new income. I do not know how income tax can be collected without a certain amount of friction. In the case of larger incomes particularly, you always have a number of border-line cases.

Some of my relatives and other people have come to me in order that I may help them with their income tax and, in consequence, I have a fair amount of experience in the way of supplying information suitable for assessments. Without an exception I can say that when I approached the inspector, and he was satisfied that the only thing I was concerned about was to assist him in getting the actual figures, I got every help from him. Only in one or two border-line cases was there any difficulty. One case had to be sent to higher officials for decision. In other cases I found absolutely no difficulty. I know that in one case there had to be at least three interviews with the inspector. It was the case of a friend of mine who thought that he had received certain income which was taxable and in respect of which he had made no return. He brought all his forms to me, and my difficulty was to persuade the inspector that there was in the State at least one person who would insist on returning as taxable income which was not taxable. The inspector told me that he had never known a case of the sort to occur before. Eventually, he was satisfied and the matter was adjusted.

The importance of what Senator Farren said is this: If people generally knew that the receipt of the demand should not constitute a grievance, and is not even a proof that they are liable for tax, much more satisfactory conditions would exist. The Cathaoirleach suggested that if you fail to appeal, that made you immediately liable for the tax. I think that is not quite the case, and the Minister will probably put us right in that respect. Even though there is not an appeal, my experience is that the inspector, if satisfied, is always quite ready to adjust a claim. Even if he were not, all that it means is that you admit you are liable for that particular income. The fact that you get an assessment for £50 on land, if you have no other income, does not prove that you are liable for income tax. It means that you have that income, and that fact could not prejudice you in getting an adjustment afterwards.

If I understood Senator Brown correctly, I think his suggestion was that the Minister and the Revenue Commissioners might consider whether it is worth while sending out assessments in the case of the small farmers. Take the average case of a man with a small income in the city. He is generally liable. Except in rare instances, he does not get an assessment until there is knowledge that his income is over £150. It is comparatively easy there because returns are made by employers and the Revenue Commissioners have methods by which they can tell the extent of a man's income. Would it not be possible, as suggested by Senator Brown, to cease sending demands where there is no knowledge in the hands of the inspector that there is other income than that which has been assessed on land held by a farmer? I do not think that means that you are relieving him from a liability to be taxed, if he has a liability; but it means there would not be an assessment of £30, £40 or £50. It would not relieve him of the liability to make a return of any other income and a liability to return £40 or £50 together with that income which might make him liable for tax. Senator Brown suggested that it might save a good deal of annoyance and possibly save administrative expenses.

As we are all interested in income tax, perhaps Senators may not be so interested if I mention a much more trifling matter. I would like the Minister for Finance to consider, in connection with the duty on cinematograph films, whether it is worth while to impose a duty on films used by amateurs. There are two sizes of film, the 9 and the 16 millimetres. The smaller film is used by amateurs. These films could not be used in picture houses but they are used a good deal by tourists who carry them round with their baggage. At the present moment tourists here have more difficulty than they experience in other countries, but I feel sure that matter could be met by ordinary regulation. The Minister might consider whether it is worth while collecting duty on the short cinematograph film used by amateurs. As a rule those films are not very lengthy—perhaps they do not exceed 100 feet in length. Simply because they are cinematograph films there is a duty charged upon them. I think that there should not be any duty charged upon that type of film. An amateur who is travelling around and who has the misfortune to get his films developed while on his trip here finds that his film is made liable to duty. Frequently he is not aware that the film is liable to duty in this country. The matter is not one of great importance, but I would like the Minister to give it his earnest consideration in the hope that such films as I have described will be released from duty.

Yesterday we had a very elaborate debate in which the necessity for more money for housing purposes was urged. To-day we have had equally elaborate arguments in certain directions as to why we should have even less money than we have. Senator Counihan said that the agricultural industry should pay no income tax, and Senator Moore suggested that the clergy of all denominations should be exempt from income tax. I think Senator Moore may claim credit for having invented the land annuities racket, and now he has planted the germ of revolt among the clergy, so that the task of the Inland Revenue Commissioners, which has been fairly difficult hitherto, will be aggravated on the strength of the advice of two responsible Senators, one representing a Party about to come into power. I do not know whether that suggestion was made on the strength of a Party decision or not, but certainly the exemption of the clergy, who are very numerous when you take all denominations into consideration, will have a detrimental effect on the first Fianna Fáil Budget.

I only suggested immunity in the case of gratuities received, not in the case of houses, lands or any other property that clergymen might have.

I think that all the income of the clergy would be in the nature of gratuities. If they bought land out of their gratuities it might be another matter.

It is in the nature of a charity, not of a gratuity.

In any case, I suppose we may take it as that Party's policy that the clergy are not to pay any income tax after the next General Election.

The Senator should not assume anything of the sort.

A tremendous amount has been made of the plight of the small farmers in regard to income tax. As the son of a small farmer and as one who has lived the greater part of his life on a small farm, I would like to get a definition of what a small farmer is.

We know what a strong farmer is.

Some people think that 200 acres of land is a small farm. As I said, I spent the greater part of my life living on a farm: I never saw an income tax demand note come there during all that time, and the huge majority of the farmers that I know have never seen an income tax demand note in their whole lives, because they are never sent to them. One would imagine from Senator Moore that the one thing that would bring a feeling of hope to the small farmers would be for the Minister to say that they will not get any more income tax demands. The Minister could give that concession and the party which demanded it could use it to the fullest possible extent, but I wonder what hope or cheer they would bring to the small farmer by doing so. It is really absurd. They do not get these forms at all, and the majority of the few big farmers who get them do not pay any income tax, so that the whole thing resolves itself into a few farmers giving half an hour or so to fill up these forms. I have heard farmers' grievances, but I have never heard that as one of their grievances, and it any man can manufacture a grievance the farmer can. Senator Comyn knows that they can make grievances where there are none, but this is not one of their grievances.

The Senator is talking of Longford or Roscommon farmers.

Yes, and they are intelligent farmers, too, as they proved. They put me at the top of the poll when they got the opportunity.

It is doubtful if they are.

Senator Comyn is in favour of higher tariffs all round, although he says that the great bulk of these would have to be paid for by the farmers, but he will bring them a glorious measure of relief, because they are to get cheaper cigarettes.

I said common tobacco.

They are to get cheaper tobacco, another message of hope for them. Some members of the Senator's Party suggested recently that there should also be cheaper stout for them, so that we are to have dearer boots, dearer clothes, and dearer hats made outside the country, and we will have cheaper tobacco and cheaper stout, but the cheaper tobacco must only be common tobacco. In the new Ireland there will be cheaper tobacco and cheaper stout for the farmers, but they will have to pay more for their clothes and their boots. I think the farmers themselves should have some voice in deciding what is good for them. A very important body of farmers' representatives gave evidence recently before the De-Rating Commission and demanded de-rating. They were asked how de-rating should be financed. What was their solution? They suggested a 1d. per packet additional tax on cigarettes, so that where Senator Comyn suggested a reduction in the price of tobacco the farmers themselves suggest, as a method of financing de-rating, dearer tobacco as far as cigarettes are concerned. There is a great conflict of policy in that respect, and if Senator Comyn professes to speak for the farmers, he is certainly not speaking for that section for which others spoke before the De-Rating Commission.

The small farmer is deluded into the belief that if taxation is reduced he will gain, but he is the one person who stands to gain by high taxation, because he himself pays so very little. The more money that is available the more chance he will have of getting money spent on public works and on various State enterprises in which his family will get employment. But the unfortunate man is deluded by unscrupulous people into believing that because taxation here averages £7 15s. a head, if he has five children and a wife he pays £7 15s. for each and for himself. I have heard a farmer coming home from Mass after a meeting outside the church ask how he could prosper when he had to pay £10 per head for each of his family. He probably never paid a penny in direct taxation. Taking into account the amount of tobacco and drink he consumes, and the amount of imported boots and clothes he buys, it would not come to £5 in three years.

That is where unenlightened people are misled, and we have had a hullabaloo here to-day about annoying these farmers and taking them away from their work to fill up income tax forms. That is the sort of thing that deludes people who, unfortunately, can be deluded. Another matter with regard to income tax is the question of bigger allowances in respect of children. When a man has a big family he is, in my opinion, doing good service as a citizen and as a Christian, and he should get far greater consideration than he does in respect of his children. He should get bigger allowances,, and with that end in view the Labour Party in the Dáil have from time to time moved amendments, but unfortunately they did not meet with any success. That would be one direction in which the small income taxpayer could be assisted to a greater extent. In Great Britain the income tax is 1s. 6d. in the £ higher than here, but the small taxpayer here, the man with less than £800 a year, pays more income tax than a similar man pays in Great Britain. I believe that men with not more than £800 a year pay more in income tax here than they do in Great Britain, so that the relief has been at the top altogether, and the lower section of the community, from the income tax paying point of view, are still paying more than they pay in Great Britain, where income tax is 50 per cent. higher than it is here.

I should like to enlighten Senator Johnson as to what took place with reference to tea. When the Minister took off the duty from tea altogether it looked a big concession, and I have no doubt that it was well intended. But what relief did it bring to tea drinkers here? Absolutely none, and for this reason: The very moment that the 4d. was taken off the tea the big combines in London who control the business jumped the price up by 6d. a lb., with the result that while the Minister here lost heavily and the breakfast table of the Irish consumer was not cheapened, the big combines absorbed tens of thousands of pounds. Senator Johnson was not aware of that.

I was well aware of it.

The big London combines got the advantage of the concession which the Minister for Finance intended to make to the people, plus another 2d. a lb.

With reference to the question of the demands on farmers, I think Senator O'Farrell understands the present position much better than any other Senator who spoke. It is true, as Senator Brown has pointed out, that we cannot have a rigid rule that no assessments shall be made on farmers whose lands are below a certain valuation, because such farmers may have other income. But in any cases where the Revenue Commissioners have no reason to believe that a man has other income the practice is to make no assessment on a small farm. Sometimes mistakes may occur; a man may be suspected of having other income and may be assessed on land, when he has actually no other income, but the policy of the Department, a policy which is steadily carried out, and which it is hoped to carry out perfectly, is that the small farmer whom there is no reason to believe has any other income is not assessed at all. That also applies to some farmers whom most Senators would call big farmers, because income tax on farming profits is generally charged on the basis of valuation, and consequently we can deal only with valuation. Where a farmer is married, generally no assessment is made unless his valuation exceeds £150, and it may be said, therefore, that, broadly speaking, no assessments are made either on small or moderately large farmers except, as I have said, in cases where the Revenue Commissioners have some reason to believe that a farmer has other income—that he has income from investments, from a shop, or from something else of that nature. There may be still even many moderately big farmers on whom assessments are regularly made and who are not liable. There is a Committee sitting to produce proposals for the simplification of the income tax code, and an attempt is being made in that connection to see whether we cannot carry any further with safety to the revenue and in fairness to the different classes of taxpayers, the arrangement for avoiding making assessments in cases where it is ultimately proved that tax will not be paid. But, of course, there are always border-line cases.

We heard a good deal about the trouble farmers get in dealing with assessments where no tax is proved to be payable. That applies to a very small fraction of cases, and, as I say, the policy of the Department is to see that no assessments at all go out to small, or even moderately large, farmers who have no other sources of income than their farms. With regard to charging income tax on gifts to clergymen, that whole question was the subject of litigation in Great Britain in 1909, when income tax was charged on gifts on Easter offerings made to a Church of England clergyman. The church authorities fought the case for the clergymen. They alleged, and in a sense they alleged quite correctly, that these were personal, non-official, freewill gifts; yet the court held that that was part of the income of the clergyman, and he was taxed accordingly. Taxation is levied here on the principle that any income that comes to a man because of his office, profession, or occupation is income for the purpose of income tax, and if we were to get rid of that principle it would mean that in business life, say, methods could be adopted for avoiding the payment of income tax on very large sums of money. It would open the door to great evasion. I do not think it would be in the interests either of the State or of religion taking any long view that we should have a special exemption from income tax in favour of the clergy. I think in the long run it would be much better that the clergyman should pay his tax the same as any other citizen. I think it would prevent agitation and trouble in future that would do a great deal of harm.

In dealing with clergymen I may say it is an instruction that is given to the Revenue Commissioners and acted upon by them that when a clergyman makes a return, if the return appears to be, on the face of it, made by a man who understood the nature of the return, it is accepted without question. There is no policy of saying, "This should have been £25 more," or anything like that. As I pointed out before, you have occasionally amongst the clergy and other people the idea that income is what is left over after all expenses have been paid. Occasionally, you would have a clergyman returning a form setting out his income as £25 or £30 a year. When a form like that is sent in it is challenged, but when any sum is returned in a form which indicates that a clergyman understood what sort of return he was expected to make it is not challenged. I am dealing now with parochial income. So far as income from investments or anything of that nature is concerned, that is in a different position. There might be cases where a man had failed to return investment income which was afterwards discovered, but taking it broadly a clergyman's return of his parochial income is accepted as he puts it in.

Senator Johnson referred to the proportions of taxation paid by the agricultural community. I think, looking at it from the point of view which Deputy Johnson looked at it, he was perfectly correct, although I think the statements made by the Minister for Agriculture and others are also correct. They made their statements on the basis that all taxation comes out of production, and that ultimately the proportion of taxation paid by the agricultural community was equal to the proportion of their production. But, so far as the actual source from which the Exchequer gets revenue is concerned, I think Senator Johnson is right. In the matter of direct payments of income tax and payments by direct tax from the shopkeeper—that is, the payment of tobacco or beer duty—I think the Senator is quite right in saying that very much less than half of the revenue is contributed by the agricultural community. I do not want to go closely into the figures, but I think that is so.

With regard to the question of income tax reliefs, it is not correct, as some Senators in the course of the discussion said, that we had reduced the tax on larger incomes and increased it on smaller incomes. What happened was that we reduced the standard rate of tax which gave relief to everybody. The British have since given special reliefs to smaller taxpayers. The financial conditions here have not so far allowed us to follow the British in giving these reliefs. I have stated frequently in the Dáil, that owing to the difference in conditions here it is quite possible that we will not be able to keep pace with the British in the matter of reliefs to the smaller taxpayers, for this reason, that we have so few large taxpayers that any relief to the smaller taxpayers costs us a much higher proportion of our total revenue from income tax than it costs in Great Britain. In Britain it would be possible to give relief to the smaller taxpayers that would cost only 10 per cent. of the total revenue, but, if we gave the same relief, instead of losing ten per cent., we would perhaps lose twenty or twenty-five per cent. of our revenue from income tax. Consequently, in a sense, it is misleading to say that we are lagging behind the British in the matter of reliefs. We are lagging behind, perhaps, from one point of view, but we may not be lagging behind if we were to look at it from the point of view of the revenue that had to be sacrificed.

In regard to the question of stimulus given to industry and to industrial development by the reduction of income tax, Senator Johnson asked if we could point to the direct effects of such relief on industrial enterprise. I believe I stated at the time the reduction of the standard rate of income tax took place that you could not see it directly, that its effects would be indirect. I think any Senator will see this, that before we reduced our standard rates by 1/- in many cases our income tax on industrial enterprise was actually higher than the British rate, although both were nominally 4/-, because in addition to income tax we have a corporation profits tax at the rate of 1/- in the £. The position that existed when our standard rate was 4/-, and when the British standard rate was 4/-, was that industrial enterprise in Great Britain was paying in the way of direct taxation to the Exchequer 4/- in the £, while here industrial enterprise, except very small ones, was paying 5/- in the £. They were paying 4/- income tax and 1/- corporation profits tax, and I think that would be very harmful in the long run to industrial enterprise here. I know cases where there seemed to be a fair measure of proof that industrial enterprise was being hurt. It would be harmful if we maintained income tax at the same rate as the British, and also charged corporation profits tax.

Senator Johnson referred to the taking of the surplus interest earned by the Post Office Savings Bank, and suggested that the rate of interest on deposits should be raised. Heretofore the Post Office Savings Bank since its establishment has been able to earn very high rates of interest on its investments, but the rates which may be earned are falling. They show a very definite tendency to fall, and there is good ground for believing that as much income cannot be earned in future by the Post Office Savings Bank as was earned in the past. It would not be justifiable, in the circumstances that exist, to raise the rate of interest payable to depositors. As a matter of fact if it were raised, in a very short time it might become necessary to reduce it again, so that the position of the Post Office Savings Bank would not be helped if that were to take place. The practice has always existed in Great Britain of appropriating for the Exchequer surplus interest earned by the Post Office Savings Bank over the amount required for payment of interest to depositors, after allowing for the expenses of administering the Bank. I do not see that we should follow any other policy.

Senator Barrington referred to delays in making repayments of income tax and was answered by Senator the Countess of Desart. There must have been some peculiar features of difficulty in the case to which the Senator referred. If he cares to send me particulars of these cases I will have a report made on them and will communicate with him.

Senator Miss Browne referred to legacy duties. It is certainly a hardship on a person if a demand for legacy duty were delayed for several years, perhaps until the amount of money received had been expended. I think that rarely happens. It is a case with which I could not deal unless I had all the details before me. I gather that the revenue authorities alleged that the demand was made, while the farmer says he did not receive it. I would be inclined, on the whole, to believe the revenue authorities in that case.

The argument of Senator Comyn in regard to tariffs has been already demolished by Senator Douglas. If we imposed tariffs for revenue, in so far as revenue is raised by tariffs, the cost falls on the farmers. If revenue has to be raised you cannot give remission following the imposition of tariffs. I rather think Senator Comyn's proposal amounted to a suggestion that we could have our cake and eat it.

The question raised by Senator Douglas about the importation of cinematograph films by tourists can be dealt with administratively. It has been under consideration, and it has been decided that where a tourist brings in a small roll of miniature cinematograph films for the purpose of taking photographs here, no charge will be made. Of course, if he were to bring in an unreasonable quantity a different position would arise. Where an American or another tourist brings in an amount which the Customs Officer would regard as reasonable in the circumstances there would be no charge. As a matter of fact, a person from this country who had been on a trip brought back some films of this kind with him that he had been taking photographs with abroad, they could be admitted free, provided the quantity was reasonable. I disagree with Senator O'Farrell when he stated that Senator Moore invented the land annuities.

So far as the allowances for children are concerned, I have indicated in the Dáil that when there is a surplus available for the remission of taxation, the Government think the remission should take the form of increased allowances for children. Senator Fanning referred to the remission of the duty on tea, and said that when the 3d. or 4d. a lb. was knocked off the tea the dealers immediately increased the price by 6d.

There is absolutely no doubt about it.

But I do not think the Senator will suggest that the increase of 6d. took place only here, or that he will suggest the increase has anything to do with our remission of the duty. As a matter of fact, the increase that took place would have taken place if our remission had not been made, and the consequence was that instead of the actual price of the tea to the consumer going up by 2d. it would have gone up by 6d., so that our people got the full benefit of the remission of the duty, even though the prices were not lowered by the amount of the duty. The Cathaoirleach asked about the question of the liability of taxes following assessment. I think in this case that both he and senator Douglas were right, because they were dealing with two different cases.

Cathaoirleach

The Senator contradicted me, which I rather resent.

Assessment follows automatically.

Not necessarily. It depends on the amount of the assessment.

Might I say that I did not mean in any sense to contradict the Cathaoirleach. I simply expressed a different view to what he expressed.

Question put and declared carried.
Committee Stage ordered for Wednesday, 25th June.
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