On the Committee Stage of the Bill the Minister promised to make a statement with reference to the simplification of farmers' assessments under Schedule B. He also promised to consider the advisability of not having income tax demand notes sent out to farmers under a certain valuation and with no other source of income. I would be glad if the Minister, when making his statement, would say whether he would consider favourably when preparing next year's Budget the suggestion that he should revert to the old system of assessing farmers on half their valuation. Farmers are the only people at the present time who are assessed on three times their income. They are supposed to have three times the income they had in pre-war days. At that time they were assessed on half their valuation. The assessment is now on the full valuation. In justice to the farmers I think the Minister should consider giving them a concession in next year's Budget by agreeing to revert to the old system of assessment. I would also ask the Minister to consider favourably the suggestion that was made by Senator Kennedy on the Second Reading of this Bill—that is, that in the matter of income tax arrears the Revenue Commissioners should not be going back as far as 1914. I think the time has now arrived when the Minister should wipe out, once and for all, all income tax due prior to 1922. In those days people may have put forward some excuse for not paying their income tax, and even though honestly due, I think that if the Minister were to insist on payment now it would put many of these people in a very precarious financial position.
Public Business. - Finance Bill, 1930 (Certified Money Bill)—Fifth Stage.
I would like to make an explanation with regard to a statement I made on the Committee Stage of the Bill. Like Senator Counihan I, too, would press the Minister to say whether he could see his way not to have farmers under some particular valuation assessed for income tax at all, so that they would not be bothered with the filling up of the forms they get. I have had personal experience of cases of that kind. Farmers in the County Kerry came to me with these forms. I then saw why they were assessed. It only occurs in cases in which a farmer has a mortgage on his farm. The Department discovers that quite easily by making a search of his file. A farmer with a mortgage on his farm stops the income tax on the interest that he is paying. As he does not pay the interest in full, the only way the Department has of getting back the interest is to go to the farmer for it. As I understand it, these are the only small farmers who are now assessed for income tax. I made the statement that they were being troubled with these forms without knowing what was the real cause of it.
I am pleased to see that the farmers have so many able protagonists speaking on their behalf in connection with this question of income tax. Last year when I asked that assessment on farmers be put back to the British system I had not one in the House to back me. Now I am satisfied that, with the backing of Senator Brown, we are going to have something done for us in the near future. I want to make this quite clear. Income tax does not touch 75 per cent. of the farmers. It was implicit in the statements made on the last occasion by those who would help that if they could see a means of helping the farmers large and small they were anxious to do so. We do not wish any concession upon income tax at the present moment. What we wish is de-rating and, therefore, those who wish to help the small farmers will have an opportunity when the Report of the De-rating Commission comes before the House to help the small farmers, as well as the large farmers, and thus they will be able to give advantage to everybody, so that it cannot be said it is only the farmers who pay income tax that will receive benefit.
Another interesting point was made in connection with the amount of money paid in taxation by farmers. Senator Johnson has shown to his own satisfaction, but certainly not to mine, that the farmer pays only 20 or 30 per cent. of the taxation of the country. I have read through his speech, and it is certainly not conclusive. As regards half the revenue from beer and tobacco, he says that man for man and woman for woman, the farmer pays as much as the urban dweller. Therefore, in proportion to the farmers' numbers, they are paying at least half of the income of the country, and perhaps 60 or 70 per cent. Is that right?
Fifty per cent.
As regards half, but the Senator leaves out of account altogether the taxation on clothes and on boots.
No.
Referring to half the income, the Senator says half is derived from tobacco and beer, and he says that man for man and woman for woman, taking it on that basis, the farmer in proportion to numbers, pays his proportionate share. Therefore, he is paying 60 per cent. of the half. But how does the Senator make out that they are only paying 20 per cent. of the whole, when he does not take into account anything about the purchase of boots, jams, clothing, sugar, duties on the transfer of property, and all other taxes in regard to which the farmer pays the same as anybody else? Therefore, the Senator's figures are absolutely wrong. I have read the Senator's statement twice, and I cannot see where he gets his figures from.
Let us take the case of a gold mine. The farmers are supposed to have the gold mines in this country. The owner of a gold mine may pay £1,000 in income tax. He may have 1,000 employees who pay £10 a year each, so that they pay £10,000. But who in reality pays all that tax? Is it not the gold mine? Similarly, all the taxes in the country come from agriculture. Therefore, we claim that whatever our proportionate share is, we pay in proportion to our production, income tax or taxes generally, of a large amount. I am sure Senator Johnson will agree that is so. We do not want any concession in income tax. What we really want is de-rating. We have advocated an increase even in income tax, so that the benefits of de-rating may be applied to the farmers.
We claim that the proper assessment of every citizen in the State should be assessment based upon the rateable value of his house. In that way you would bring about equality. The £1,000 a year a man pays rates only upon his house. We want to bring about a position in this country where the rateable assessment shall be based on the house of the individual citizen and not based on anything else. That is the only way you can get equality. The £3,000 a year judge pays rates on his house, and he gets off with the rest. The farmer with a rateable value of £50 a year will pay probably as much as the £3,000 a year judge. That is iniquitous. The owner of the farm must live in a house and the rateable assessment ought to be on the house of each individual citizen and, in that way, you would get equality and you will not get equality any other way.
You would not get any tax.
I am speaking of rates. The rates should be based on the house the citizen lives in in order to bring about equality. The case was cited here yesterday of a schoolmaster living in a house of £5 valuation and paying rates only on the £5 valuation, as compared with a farmer, and that only goes to show that the farmer is placed in a very bad position under the present law. I do not press this point any further, but I hope that when recommendations from the De-rating Commission come up here for the relief of the rates on farmers those who are so friendly towards me now will meet our claims with the same encouragement that they have met me to-day.
I wish to call attention to a particular matter in connection with farmers' income tax and the returns they have to make, and I would ask the Minister to make a note of it. I do not suppose that he can answer just now. I have here a certain form, 138 L, that I have received for the first time; I thought I was familiar with all these forms. This is a demand put to the farmers and it applies to Schedule B only, for some obscure reason. In this form the occupier is put through the most terrible inquisition as to all the details of his holding and his outgoings. He is asked a number of questions as to his cattle dealing and selling and milk, whether he lets machinery out for hire. He is asked for a return of his total income and charges thereon. And all these are duplicated in other forms which he has to fill in when making claims for repayments. Again, all this is approached from another angle in form 79 B, but covering very much the same ground.
I get perfectly bewildered with all these forms. There really seems to be no reason for this new one which has come out this year for the first time. It appears to be a sort of originating form and does not appear to have any regard to any specific tax. It appears to be a form irrespective of any return. Will the Minister tell us something about this or will he inquire into it? I want to ask him also to consider whether he would not have any inquiry made into the whole question of grants-in-aid of local taxation. I must admit the whole matter is very complicated. The Poor Law Commission had it before them and I think the Minister will find that they made a recommendation to the effect that the matter was in a very confused condition. Yesterday we had the question again on the Vocational Education Bill. I think the Minister will admit there are great inequalities in the way the grant is now administered in the different districts served. It was shown that a rich county gets a far larger percentage of grants than a poor county. I do not want to prejudice any inquiry but there should be an inquiry in this matter to see whether the grants are distributed on an equitable basis. It is complicated and it could only be done in the form of a comprehensive inquiry.
I think there is great wisdom in what Senator Sir John Keane has just said. These grants-in-aid of rates should be more equittably distributed in regard to the poorer counties. We had the admission from another Minister, some days ago, that no matter what public buildings may be erected in a certain county the Government could not increase the grants-in-aid because it had already reached its quota, apparently, in respect of Gárda barracks. That is very unfair and I urge the Minister to pay particular attention to what Senator Sir John Keane has said in this matter.
In reply to Senator Wilson I would ask him to answer the question he himself put, whether, whenever there have been remissions of taxation, or whenever there will be remissions of taxation, he agrees that those remissions all go to the farmers? If he does not, then it is obvious that his contention that the farmers pay all the taxes has no foundation. I am not doubting his word that my statement, on a former occasion, was not very illuminating or very clear. I shall try to make it clearer. For the year ending 1928-29 the total sum yielded by taxation was £20,930,000. Of that, £10,576,000 came from beer, spirits, wine and tobacco. My analysis of the census returns shows that the persons living in farmhouses and in the houses of agricultural labourers—taking these as the agricultural population— would be almost exactly half the total population.
The rural population—that is persons living outside the cities, towns and villages—comprise 61 per cent. of the total population, and we take 61 per cent. as the basis of calculation. I think Senators would be slow to admit that, man for man and woman for woman, the agricultural population drinks as much whiskey, beer, spirits and wine, or uses as much tobacco as the townspeople. But assuming that it is so, then the revenue derivable from beer, spirits and tobacco consumed by them amounts to £6,500,000, out of £10,500,000. I give an estimate which is quite arbitrary that the agricultural population pay 25 per cent. of the estate duty and ten per cent. of the income tax. I think in both cases that is probably an excess, but if it is anyway accurate, it means that the total revenue derived from taxes from the rural population amounts to £7,728,000. That would be about one-third of the total revenue from taxation. If my figures regarding the agricultural population proper are to be taken as the basis of calculation, then there is a deduction which would make the total revenue derivable from the agricultural population 31.4 per cent. I think the assumption is against the farmers in respect of their consumption of intoxicants and tobacco, and that in fact the revenue yielded from the agricultural population is considerably lower than 31 per cent.
When Senator Counihan mentioned a simplified form of accounts, I presume he really meant a simplification of the forms to be filled up by those who do not present accounts. I am prepared to have that question examined very carefully. As a matter of fact, it has been the subject of some examination already, with a view to seeing whether it is possible to devise a form which would meet the reasonable requirements of the revenue authorities, and still be easier for the ordinary farmer to fill up. I would be prepared to arrange that officers of the Revenue Department should discuss the matter with the Senator or with any group of farmers interested in the matter, in order that the point of view which Senator Counihan holds, and which others may hold, can be put before them in detail, and be the subject of frank discussion. In any case, whether Senator Counihan avails of that suggestion or not, an effort will be made to simplify the form as far as possible.
With regard to the sending of demand notes to farmers who have no other source of income, I got a return for one area since the matter was raised and I find that out of 20,000 farmers in the area only 185 of those who were not known to have other sources of revenue received forms, so that as far as the sending of forms to farmers who have no other source of income is concerned, very few of them are sent out. I admit that farmers without other sources of revenue received forms, and that a certain number are not liable to tax, and it may be possible to reduce in some areas the number of forms actually sent out. A certain number will have to go out. In certain places the valuation would obviously make them liable, and in that case the forms would be sent in order that they may pay tax if they cannot show that they are not liable. In other cases, it may incorrectly be believed that farmers have other sources of revenue, and a certain number of forms are bound to go to farmers who are believed to have other sources of revenue although they may still prove not to be liable to the tax. The policy, at any rate, is clearly one of not sending out forms unless there is some good ground for believing that the persons who receive them will be liable to tax. The Senator will see that to send out forms otherwise would mean not merely causing annoyance but a great increase in the work of the office.
So far as the question of reducing the basis to one-third of the valuation is concerned, I do not see any ground for that, and I would like to say again that the question of income tax on the profits of agricultural land, broadly speaking, does not affect farmers. It affects those who are farmers plus something else, such as farmers and shop-keepers. The real question of income tax on agricultural land is, one might say, of no interest to the farmer. The form which was referred to by Senator Sir John Keane is an old form, issued to enable a man to claim reliefs in certain cases. I believe it is a form that is not very frequently issued, but it has been in existence for a long time.
With regard to recasting the system of grants-in-aid of local taxation, the objection that I see to initiating an enquiry into that is this, that I think such an enquiry would inevitably result in a very large increase in the total amount of grants that would have to be paid, because if it was found that the distribution of the grants was inequitable, I think we would be unable to take away any grants from places where they were held to be too large, while we would have to give a large increase to poorer areas to bring them up relatively to the level of areas well endowed at present. For that reason, I would be inclined to hesitate very much about going into the question that the Senator put forward. I admit that there is no logical basis for the present distribution of, say, the agricultural grant, but I am certain we could not re-distribute that grant. We could not take a grant from some counties that have it if we wanted to balance up matters. We would simply have to double the grants at present paid. I believe that the matter of grants-in-aid of local taxation can only be examined perhaps in connection with the Report of the Commission on De-rating. If some big reform of local government and local taxation is going to be undertaken, naturally the question of grants-in-aid would have to be considered as part of that change. But to consider grants-in-aid by themselves as a separate matter of enquiry would, I think, only lead, as I have said, to a very considerable increase in the amounts to be paid.
I am thankful to the Minister for what he has said and for his promise to simplify the forms of account. I certainly will avail of the opportunity he has offered during the Recess. Though we may criticise the Minister, we all believe in our hearts that the country is very fortunate in having a Minister who keeps such a tight hold on the purse. Otherwise the money would go very quickly.