The point I would like to call attention to is the provision which allows the deduction from the 8d. in the pound of the Preferential Rates of duty. This particular part reads: "provided that Section 8 of the Finance Act, 1919, shall apply." The essence of that is that it gets this one-sixth off.
FINANCIAL RESOLUTIONS—REPORTED. - TEA DUTIES.
Resolution No. 7 read a second time.
I would like to move an amendment that the tax be reduced to 6d. I do so for many reasons, as this tax illustrates the essential injustice of indirect taxation. When the President stated a couple of days ago that Income Tax was the fairest tax that could be imposed I heartily agreed with him. Although none of us is in love with paying any taxes, and perhaps least in love with Income Tax, at the same time, if we admit that taxes have got to be paid on something and that the Government must have revenue to carry on the business of the country, and if we cast our minds about as to the manner in which that revenue should be derived, we must admit that indirect taxation is unjust because of the casual and haphazard manner in which it presses on certain individuals. People who drink tea pay this tax; people who do not drink tea escape it. People who drink beer or whiskey pay a very considerable proportion of the revenue of the country.
Willingly.
Though there is no essential reason why the people who drink beer or whiskey should pay for the upkeep of the State more than anyone else. Personally I am in the fortunate position of escaping most of those taxes, but there is no particular reason why I should escape. Assuming that the position of every citizen of the State were the same, they ought all to have an equal responsibility and liability to contribute towards the upkeep of the State, but a tax of this kind, which falls not only upon the poor but upon the poorest of the poor, illustrates the essential injustice of deriving the revenue of the State from indirect taxation of this kind. The millionaire and the old age pensioner pay the same tax upon tea per pound. In actual practice the millionaire drinks a great deal less tea than the poor person, and therefore the poor person might pay four or five or six or ten times the tax upon this particular article compared with what the millionaire pays. I was glad, for another reason, to hear the President make the remark he did, because, while he is maintaining that there can be no general variation in taxes this year, if he is in the same mind next year we may look forward to a radical alteration in the whole method of levying taxes. We may see him sweeping away all these taxes and imposing an Income Tax proportionate to everybody's income. Well, if he does, then, although he has probably a good deal of nerve in many directions, I do not think he would have the nerve to propose that old age pensioners should be taxed upon their income. They are taxed under the present system. The old age pensioner or the unemployed man or woman drawing the unemployment dole is taxed by the tax upon tea and sugar, and in many other directions, but I doubt whether the Minister for Finance would have the hardihood to propose that Income Tax should be levied upon the old age pensioner. At any rate, if he did I think we would be able to demolish his case with the greatest possible ease. In private life I know that the Minister has a heart but as Minister for Finance I am not so sure that he has one. At any rate, I would appeal to him to allow some remission upon these taxes not so much because of the amount of money involved, but because of the indication of the trend of thought in which his mind is travelling in regard to taxation. It would be an indication to the people generally that when he has had time to go through the whole question and bring in his Budget next year that he would endeavour to adjust taxation to fit the burden to the back that has to carry it and see that taxes do not press upon the poorest section of the community, and I think he ought, by a small remission, to give an indication that his view would be that in any change made that it ought to be taken off that section of the community and the burden placed elsewhere, and therefore I move that this tax be reduced by 2d. in the pound.
I have much pleasure in seconding that. It delights me to hear support from the Labour Benches of this great doctrine that we should, as far as possible, set out upon a course of drawing the revenue from direct taxation rather than from indirect. It is true I owe the Deputy an apology. I thought his eagerness to espouse this cause was due to the determination of the Labour Party to pay no Income Tax, but he made it clear that he is willing to have Income Tax charged upon all incomes that are in the nature of personal acquisition or personal achievement, I may call it for convenience, to distinguish the income that a man gets for his work as from the income which is really a sort of charitable support. This tax upon tea is to fall more lightly upon Indian and Ceylon tea than upon China tea. Now, I think I shall have the support of the medical representatives in the Dáil in maintaining that it would be better for the health of the community that a premium should not be set in this fashion upon the drinking of Indian tea as against the drinking of China tea. The temperance advocates will tell you, and I think tell you properly, that the stimulant of tea is a useful stimulant, and, though not altogether non-injurious, is less harmful, on the whole less hurtful, than intoxicating drink. The temperance liquors in Great Britain and across the border are to be exempted from the 4d. they have formerly borne, and I think we ought to encourage temperance drinking in the same way.
I know that as Minister for Finance the President would like to have the country drinking whiskey without limit, but as a man and a brother I am sure he would favour the policy of a sober country. At any rate, it is quite conceivable that by the judicious use of tea and coffee as a blend for the whiskey, the whiskey might possibly be consumed in a greater measure and with less injurious results. This point is lost sight of in our discussion about Income Tax and other taxes. There is nothing in the present Budget to recommend the new regime to the people at large. After all, no matter how sentimental one may become, whatever sunburstery we may indulge in over our liberty and our self-government, the ordinary man in his ordinary moments will apply as the test of the value of what we have got how it affects his pocket, and if the burden is the same it would be hard to convince him that he has gained because his status has, as an individual, been elevated.
There is an old Greek fable of a merchant who was driving a heavily-burdened taxpayer—I mean ass—and he came to pleasant pastures, whereupon he descended and turned the donkey free. After a while he heard the distant sound of oncoming horsemen, armed enemies, and he hurried to catch the donkey and said "Make haste, the enemy is upon us," and the donkey made answer and said "Will they put heavier burdens on me than you do," and the man honestly replied "I do not know," whereupon the ass answered "Then it makes no difference to me," and he went on browsing in those pleasant pastures. I am afraid the ordinary man will not be inclined to value this boon he has got of citizenship in the Free State, in which he has self-determination, if it is going to cost him more. I am a strong advocate here, a poor advocate no doubt, but strong in the subjective sense that I am keen upon having things done according to policy. I would like the Free State to be made palatable to the people. If your Free Stater has a cheaper, nicer and better breakfast table he will thank his God for the Free State. It is an indirect way of exciting loyalty, and I think it would be worth the money. It is really a large part of the population that is affected by this. Again I say I would rather it was put on in direct taxation. Everyone tells me it is easier to get money when a man does not know he is giving it. It is easier to get in the taxes from tea, tobacco and sugar, because people will consume these, and they are not aware that much of what they are paying for them they are paying in the form of taxes. Those who are interested in making good citizens of the State would like to have it made perceptible that what the citizen is paying for is good administration, that the administration is his, that he is paying pro rata for it, and that he is to indulge a healthy criticism in regard to making appropriate demands for it, and that its success and that his success are part and parcel of the one system. You may get a bigger revenue in this fashion by not allowing a man to know whether or not or to what extent he is bled. On the other hand, you will promote healthier citizenship if you will let him know the exact measure he is contributing, so that I think there is a variety of reasons in favour of reducing the tax on tea and sugar, the necessities of life with the majority and generality of the people and taking it out of other citizens in another form, rather in direct taxation.
I rise to support the proposition put forward that the tea duty be decreased from 8d to 6d. I think the Dáil would naturally wish to know quite clearly exactly what the reduction would cost. I have before me figures provided by the Ministry showing that at the 8d. rate the tea duty amounted to a round sum of about £800,000. Assumedly, therefore, the 6d. rate would amount to £600,000, showing that the reduction called for would be a reduction of no more than £200,000, assuming that the same quantity of tea would be consumed at the 6d. as has been consumed at the 8d. rate, although I think it is perfectly true that a greater quantity would very likely be consumed, and therefore the difference would not be quite so much. It is generally acknowledged, in any case, that the cheaper a commodity the more is consumed of it. That is a simple elementary fact in economics, but in any event I suggest that the reduction would not mean any considerable loss at all, or any loss so considerable as would appear in a reduction of £200,000, and for this reason. We know that it is true at present that the majority of the tea consumed in the 26 counties of the Irish Free State passes through the distributing centre of Belfast, and will so continue to pass as long as the rate of duty between the two is exactly the same. One knows perfectly well by reducing it to 6d. instead of 8d. that the distributing trade for the 26 counties of the Free State, which is at present the monopoly of a city in Ireland but not a city of the Free State, would be captured for Dublin. An increase of business would result, and a large proportion of what would appear to be prima facie loss on the actual tax would be gained through Income Tax chargeable on the extra amount of business done by Dublin merchants that hitherto had been done by Belfast merchants. It is upon that ground I suggest that if the tax were to be reduced from 8d. to 6d. the loss in revenue would be very little indeed, but the gain in the commerce of the 26 counties would be very considerable.
There is a further item worth consideration; there is a very complicated frontier between the six counties and the twenty-six counties. If the tea duty were to be reduced for the twenty-six counties to 6d., while still prevailing at 8d. for the six counties, I take it to be a case proved in ordinary commercial experience that the distributing trade of the twenty-six counties would be captured for the distributing trade of Dublin as against the distributing trade of Belfast. But I go further. I say that a great deal of the business of the six counties would also pass through Dublin. I say it would be quite impossible to stop a certain amount of trade passing across that complicated frontier, which would be very difficult to protect, so that actually in total results the Dublin distributing trade would go to supply the six counties. That would be a very profitable business for us to contemplate. It might be said that it would be an illegitimate business to contemplate, but I do not ask that we should contemplate it as a State but to confine ourselves to what I may call category A of my argument and let category B be developed by such persons as desire to engage in it. The result would be an increase in revenue, and the argument that I place before the Dáil at present is this, that although it may appear, on the face of the facts that a reduction from 8d. to 6d. would mean a loss of £200,000 in revenue, I suggest that a reduction from 8d. to 6d. would mean very little loss in revenue indeed, and certainly not such a loss as the arguments on the face of the facts would seem to assume. I think it would be very good business for us. I think it is excellent that such a reduction should be made in the interests of the people of this country, to whom tea is a necessity: that is a strong argument in itself, and I do not put it forward here because it has been put forward by those who spoke before me. I add to their argument this further argument, that in addition to benefiting the actual consumers of the 26 counties there would be no loss of revenue to the State, but there would be a considerable accretion to the business of the Free State.
I do not rise to support the amendment, but I wish to express my sympathy with the arguments of the proposer, particularly when he suggests to the Minister for Finance that in any change which he may make next year he should give some relief to the poor man in respect to the taxes on tea, sugar and tobacco. Those taxes amount to £6,000,000. I submit, as was contended here, that tea and sugar are necessities of life in Irish homes and the tax they pay on them and on tobacco, which has also become a necessity, is too large a fraction of the total income to be just. Before a Commission set up by the British Government it was proved that the budget of one million of our people was only from about 10s. to 12s. a week. If you bear in mind how hard it is for these people to live I think that the State that extorts £6,000,000 in taxation on such necessities as tea, sugar and tobacco is taking too much altogether from them. There are £4,000,000 obtained on beer and three and a half millions on spirits. There are taxes on entertainments, matches, etc. The poor man pays his full share of those taxes. If you take the rich man's income and compare it with that of the poor man, and if you omit the taxes on tea and sugar, the poor man would still be paying his fair share of taxation. That £6,000,000, or portion of it, could easily be found elsewhere.
Why not, as suggested on the other side of the water, put a tax on betting? Anyone who sees the well-to-do people who go to Fairyhouse, Baldoyle and Leopardstown, or Punchestown, or sees illustrations about them in the papers, will be convinced of two things—first, of their ability, and secondly, I am confident, of their willingness to pay this contribution. Some people say that you would be putting a tax on gambling. In my opinion there is something amounting to unconscious hypocrisy on our part in our attitude towards that. Betting is going on like drinking and it will go on, whether you put on a tax or not. It is well able to bear taxation. There is no gambling on that tax, however, for whether the backer wins or the layer wins the Government wins every time. I have great confidence in pointing out to the Government that such a tax is there for the reaching out of their hands, and that it is a tax on people well able and willing to pay.
The tax collector ought to be ashamed to come to the homes of poor people for taxes they cannot afford, and it is a gross injustice. The amendment does not go far enough. I would take off that tax on tea. It is a miserable tax. Tea is becoming a necessity and a luxury together. If you take off only 2d. the manufacturers will gobble that 2d. and the consumer will never get it. I am sorry I cannot support the amendment, but I would strongly urge on the Government to make that alteration in the incidence of taxation.
I take it that when this amendment is disposed of Deputy Sears will move a further amendment to delete this tax, in order that his conscience and his intellect may be satisfied. All his arguments are in favour of supporting the amendment, and more than supporting it, but he tells us finally that he is going to vote against the amendment. Nevertheless, I have no doubt his arguments will help to convince the Minister for Finance that the amendment ought to be accepted, or that he ought to go one better and abolish the tax entirely. Perhaps if the Minister might signify his acceptance of Deputy Sears' arguments, any further discussion would be unnecessary. I see the Minister declines to accept Deputy Sears' arguments. I agree in some respects that this particular tax ought to be considered, as Deputy Figgis has dealt with it, in relation to the sugar tax. It is in the nature of the breakfast table taxes. It is a tax upon the housewife. This and the sugar tax we may take as taxes upon women, and Deputy Sears has pointed out that the amount is unconscionably large—too large in proportion to the whole of the taxation. I find, for instance, that the tea and sugar taxes in Britain comprises but one-twentieth of the total revenue, and yet the tea and sugar taxes over there are alleged to be abnormally high. One-twentieth of the total revenue in Great Britain is derived from the tea and sugar taxes, but the proposal of the Minister for Finance here is to take from the housewives of the country, and more particularly, perhaps, from the children of the country, who are consumers of sugar to a very great extent, one-seventh of the total revenue. One-seventh of the twenty millions that is intended to be derived from taxation in the ensuing year is to be imposed upon the women and children. That is abnormally high, and is an unfair tax upon the breakfast table, but it is more unfair when one considers that this is the article that the poorest all consume. With the tobacco which Deputy Sears has spoken of, and which, perhaps, is not under discussion, it is one of the little luxuries which have become necessaries. You are proposing to impose on the poor consumers of those luxuries—to take out of the housewives' basket one-seventh of the total revenue of the country. It is well that we should examine the incidence of taxation in this way, and if we do we shall find that out of every twenty shillings of revenue that is estimated for, these taxes upon necessities, or what are practically necessities—tobacco, sugar, and tea—amount to 6s. 4d. in the pound. The income tax, the property tax, the estate duties, stamps, corporation profits tax—those particular types of taxes which are taxes directly upon the wealthier section of the community, the people who are reasonably able to pay those taxes— only amount to 5s.—one-quarter of the whole revenue. I contend that the incidence of taxation falls too heavily upon the poor. The amendment of Deputy O'Brien is one little effort to relieve to a very small degree taxation upon the poor, and, combined with an effort which will be made to reduce the tax on sugar, would help to relieve to some extent those taxes. The Minister has voluntarily, unnecessarily, and gratuitously, I contend, handed over to the income taxpayers, say, half a million pounds. Well, that is a very generous amount; but I think we ought to extend our generosity and relieve the consumers of sugar and tea of a like amount, of which half, perhaps, ought to be taken off tea. I beg to support the amendment.
I should just like to say that if Deputy O'Brien, the proposer of this amendment, and Deputy Sears and Deputy Figgis who, I understand, support it, will support a proposal that "Beavers" be taxed, I shall certainly have great pleasure in supporting the amendment.
A characteristic civility.
I do not know whether Deputies are aware of the fact that last year the tax on tea was reduced by 4d. per lb. That may not be within the general knowledge, but it is a fact. This proposal would involve a very considerable reduction of Revenue—Deputy Figgis and his financial figures notwithstanding. I have not got the happy knack of the Deputy of leaving my conscience outside the door when I come in here. I have to bring it along with me, and I cannot close my eyes to facts. I do not know that one is justified in urging that "Although I cannot reconcile my conscience to this, it will hit the North or someone else." I do not see that. What would be the actual result of this amendment if it were passed? It would be that you are going to sacrifice £200,000 at a time when you are not justified in reducing the revenue of the country, and when £20,000,000 have got to be raised through other sources than taxation. The case put up is, that this presses heavily upon the poor as regards tea, sugar, and so on. From sugar, molasses, etc., the sum estimated to be received— I am not exactly standing on this Estimate—is £2,350,000. I do not know whether Deputies here ever partake of Tipsy Cake, but sugar is used in that. I do not think it is an article that appears too frequently on the dinner tables of the poor. Other articles are sweets and chocolates, and sugar is largely used in their manufacture. The net result is, that this item alone is estimated to bring in a Revenue of £2,350,000. It is urged that all this will press heavily upon the poor, and that they will be the principal contributors to this tax. I say that is a very exaggerated statement. I do not know that it is wise, without more exact knowledge of the situation, to take this particular estimate in hand, and say, that from the rich you derive three or four million pounds, and then to say that they do not contribute towards the other items in the list, such as tobacco, tea, sugar, and things like that. Under these items, the rich certainly contribute their quota. £200,000 means 4,000,000 shillings, and that is the amount we are asked to save. Four million shillings means 1s. 4d. per year, per head. If a family consists of six persons, it means 8s. per family, and that divided by fifty-two means less than 2d. per week, per family, and the unfortunate poor families in this country are to be bankrupt because we will not take off 2d. per family per week.
There are other two-pences.
I did not interrupt the Deputy when he was speaking. There are other two-pences; there are other methods of describing two-pences, and there are very vulgar descriptions of two-pences that I am not going to tell the Dáil about, but I may say that if we are going dishonestly to reduce this source of revenue amounting to £200,000, we will have to raise it otherwise and that would mean an unjust imposition on other people, having regard to the fact that last year four pence was taken off the tea duty. I was in some doubt, when Deputy Magennis told us the fable about the ass as to what he wished to convey. The ass was not asked to transfer his allegiance from the English Government to the German or some other authority alien to his country, and that is the position here. I remember reading once a story by a celebrated American, or Irish-American author, of the name of Dooley, and he dealt with a type not unknown in this country, called bachelors. There was a proposal to tax them, and Dooley dealt with that matter and with the various troubles that taxation of that sort on bachelors was calculated to bring about, but he said when it came to the real question of the tax there was not one bachelor in the States but would come down to the counter in the Treasury Office and put down his five dollar bill and exclaim: "Hang the expense, boys, it is worth it." If there are tea-drinkers in this country I do not think they will object to pay this 2d., especially considering it will only cost them 1/4d. per year, which is a good deal less than one farthing per week.
I do not think a good case is made out from the point of view that this is an unjust or unfair imposition. I think it will be admitted that the figures are correct when I say that this reduction of 2d. would mean a loss of £200,000 or 4,000,000 shillings per year, and would only mean a relief of ¼ per head of the community. Is that an unjust imposition? I do not think it is, and I do not think we would be justified in borrowing £200,000 in order to give relief to poor and rich alike to the extent of 1/4 per year or a farthing per head per week.
The amendment is to delete the words in the resolution, "continued to be charged," and to insert in lieu thereof the words "be reduced to sixpence per pound."
Question put.
The Dáil divided: Tá, 15; Níl, 39.
Tá
- Tomás de Nógla.
- Riobárd Ó Deaghaidh.
- Darghal Figes.
- Tomás Mac Eoin.
- Liam Ó Briain.
- Liam Mag Aonghusa.
- Tomás Ó Conaill.
- Aodh Ó Cúlacháin.
- Ristéard Mac Liam.
- Seán Ó Laidhin.
- Cathal Ó Seanáin.
- Seán Buitléir.
- Domhnall Ó Muirgheasa.
- Ristéard Mac Fheorais.
- Mícheál Ó Dubhghail.
Níl
- Liam T. Mac Cosgair.
- Donchadh Ó Guaire.
- Uaitéar Mac Cumhaill.
- Seán Ó Maolruaidh.
- Seán Ó Duinnín.
- Mícheál Ó hAonghusa.
- Séamus Breathnach.
- Seoirse Ghabháin Uí Dhubhthaigh.
- Deasmhumhain Mac Gearailt.
- Mícheál de Duram.
- Seán Mac Garaidh.
- Pilib Mac Cosgair.
- Domhnall Mac Cárthaigh.
- Éarnán Altún.
- Sir Séamus Craig.
- Gearóid Mac Giobúin.
- Liam Thrift.
- Pádraig Ó hOgáin.
- Pádraic Ó Máille.
- Seosamh Ó Faoileacháin.
- Seoirse Mac Niocaill.
- Piaras Béaslaí.
- Fionán Ó Loingsigh.
- Séamus Ó Cruadhlaoich.
- Criostóir Ó Broin.
- Caoimhghin Ó hUigin.
- Próinsias Bulfin.
- Pádraig Mac Artáin.
- Séamus Ó Dóláin.
- Aindriú Ó Láimhin.
- Próinsias Mag Aonghusa.
- Peadar Ó hAodha.
- Séamus Ó Murchadha.
- Liam Mac Sioghaird.
- Tomás Ó Domhnaill.
- Éarnán de Blaghd.
- Uinseann de Faoite.
- Domhnall Ó Broin.
- Séamus de Burca.
Amendment declared lost.
I move that the Dáil agree with the Committee in the said resolution.
I beg to second.
Apparently Deputy Sears does not intend to move his amendment, and I should like an actual explanation as to the effect of passing the motion moved by the Minister for Finance. The motion reads: "That Customs duty at the rate of 8d. in the pound is payable on tea." If we pass the resolution, what will be the duty on tea?
Sixpence and two-thirds of a penny, except as regards China tea; that will be 8d.
Is it a verbal mistake to speak of eightpence in the pound in the resolution? Should it not be eightpence per pound of tea?
Yes, or it might be eightpence the pound of tea.
I take it that it is agreed that we might omit the word "in" so that the resolution would read: "That the Customs duty at the rate of eightpence the pound which is payable on tea imported," etc.
Agreed.
Question: "That the Dáil agree with the Committee on the said resolution," put and agreed.