Dáil Éireann díospóireacht -
Friday, 25 Apr 1924

Vol. 7 No. 1

COMMITTEE ON FINANCE. FINANCIAL RESOLUTIONS. - RESOLUTION No. 14 (INCOME TAX).

Mr. BLYTHE

I move Resolution 14:—

(1) That income tax shall be charged for the year beginning on the 6th day of April, 1924, at the rate of five shillings in the pound.

(2) That super-tax shall be charged for the year beginning on the 6th day of April, 1924, at the following rates—

In respect of the first two thousand pounds of the income	Nil.
In respect of the excess over the two thousand pounds—
For every pound of the first five hundred pounds of the excess	One shilling and sixpence.
For every pound of the next five hundred pounds of the excess	Two shillings.
For every pound of the next one thousand pounds of the excess	Two shillings and sixpence.
For every pound of the next one thousand pounds of the excess	Three shillings.
For every pound of the next one thousand pounds of the excess	Three shillings and sixpence.
For every pound of the next one thousand pounds of the excess	Four shillings.
For every pound of the remainder of the excess	Four shillings and sixpence.

(3) That the several statutory and other provisions which were in force during the year beginning on the 6th day of April, 1923, in relation to income tax and super tax shall, subject to the adaptations and modifications made in such provisions by or under the Adaptation of Enactments Act, 1922 (No. 2 of 1922), and subject to the provisions of the Double Taxation (Relief) Act, 1923 (No. 8 of 1923), have effect in relation to the income tax and the super tax to be charged as aforesaid, for the year beginning on the 6th day of April, 1924.

(4) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

This resolution, which fixes the super tax limit at 4s. 6d., is practically one with a proposition which does not require a resolution, that is, the proposition fixing the death duties at a limit of 25 per cent. As that is purely a remission of a permanent tax a provision will appear in the Finance Bill, and a resolution at this stage is not required. It is required at this stage that Income Tax be renewed this year. I may say in passing, with regard to the first part of the resolution that we found it impossible to reduce the 5s. Income Tax rate. We realise that if it were possible to bring the income tax down it would have a stimulating effect in many directions in the country, but it would mean a 6d. reduction, and that would be practically half a million pounds, which we could not by any means afford. This particular proposition, even allowing that the Death Duties proposition did not lead to anybody coming here to pay us taxation, would only cost about £14,000. We really anticipate that the two propositions taken together, should give us some appreciable increase in revenue.

Mr. JOHNSON

I hope before the next consideration of these Resolutions we shall have circulated some statistical information which may be at the Minister's disposal, and that whatever is available will be circulated. Otherwise we are not able to consider the effect of these Resolutions at all satisfactorily or intelligently. This particular Resolution is one in point. If we take the Minister's word for it, as no doubt we must, the effect of the remission of the higher ranges of super tax is not going to cost very much, and it may be, and likely it will in the Minister's view, rather add to the national revenue. But for that assurance I should oppose the Resolution as strongly as possible. May we have some information as to the incidence of the income tax generally and the number of persons who were paying it at the different rates, or the total incomes that may be payable at different rates or the total revenue derivable, from last year's experience of the different rates.

It may be that the Minister has not the full amount of information, but he may have some, and I think it is time that we received some statistical information. When we are dealing with the imposition of taxation, we ought to have as much information as he can possibly give us. In this case we have more or less to take the Minister's word for the effect of the alteration in these taxes, but we would like to have as much information between now and the next stage as it is possible for him to circulate, so that we will know exactly where the shoe pinches, and where we can make it pinch more severely on one person than on another.

Mr. HEWAT

I think that is an admirable proposition of Deputy Johnson. We ought to get all the information we can. We would like to make these income taxpayers squirm. Let us realise what the poor devils are going through. Let us examine the effect of this income tax on trade, which is so repugnant to Deputy Johnson. And let me assure you that a little relief in income tax would do more for the furtherance of trade than anything in the way of Protection, covered by this Budget. Income tax at its present level, with the variation in income tax in Great Britain, where a lot of securities are held, is a matter of very great importance to this country. I do not know whether we all realise its importance or whether we realise the number of people who have left this country, not for the country's good, but largely because of the differentiation in income tax in the two countries. The farmers say they are not making any money at all, that they are in a bad way. When the State has done with some of the incomes knocking about, those incomes are not of much use to anybody. We are all living for the State, and when we die, we die for the State.

Mr. HEFFERNAN

I am very sorry the Minister did not take his courage in his hands and reduce the income tax by 6d. in the £ to the English level. For the first time to-day, I am at one with Deputies on the Independent Benches. I really think, even from the point of view of revenue, it might actually pay the Minister to reduce the income tax to the level of the British income tax. The volume of business which would result and the number of people who would come here to reside owing to the lessened income tax, would be considerable. Another point of view which, I am sure, the Minister cannot have possibly overlooked, is the effect it would have on our relations with Northern Ireland, and the possibility that it would make the negotiations which may take place in the future much easier, and make the business people in the North much more anxious to amalgamate and come into union with the South.

Incidentally, I am sorry the Minister did not see his way to introduce some clause dealing with the position of the farmers in connection with income tax. Farmers have been paying income tax on the valuation or annuity, whichever happens to be the lowest, and I know from my experience that many farmers are paying income tax who are not making any money at all. The option is given to them of making a return of profits if they wish, but I would like to point out to the Minister that a great many farmers do not happen to be accountants and do not happen particularly to be accountants of the type which the Income Tax Authorities would acknowledge. I know from my slight acquaintance with the income tax people that a man must be an expert accountant to get even abatements that he is ordinarily entitled to. That is altogether beyond the ability of the average farmer. It is my opinion that if a farmer be a good farmer, it is as much as should be expected of him, and that it should not be expected that he should be a good accountant at the same time. I would suggest to the Minister that he should consider the advisability of reducing the standard on which the farmer is charged to at least half the valuation. Even if it cost half a million and if the Minister thought it wise to take off the extra 6d. from the income tax, he might very well find that the chance was worth taking and that he would be amply repaid at the end of next year.

Mr. BLYTHE

To begin with, I think there are unfortunately not very many farmers paying income tax. In my opinion it would not do a farmer any harm if he studied accountancy and kept accounts. If the income tax were reduced 6d., there is no doubt we would not lose the value of the entire yield of 6d., but we would lose substantially. We would probably regain most of the value of that reduction ultimately. But we are now in the position of having an unbalanced Budget—an actual deficit—and we could not face a reduction of tax which would increase that deficit at the present time.

Professor THRIFT

I am sure the Minister has considered the fact that there are many people who have waited twelve months to see if this increase in income tax was likely to last, and they will now probably decide it is going to be continued.

Mr. CONLAN

I think the Minister is very badly informed as to the number of farmers paying income tax. The income tax authorities have spread their net so widely that they take in every substantial farmer in the country, so that in addition to paying excessive local rates they are further burthened by income tax. In support of what Deputy Heffernan has said, I would urge that it would be a great relief to the farmers if the Minister could see his way to make a concession in the direction of fixing a new standard on which income tax would be payable.

Sir JAMES CRAIG

I wish to express my regret that the Minister has not seen his way to make a reduction in the income tax. I do not speak for any personal reasons, because the amount of tax I pay is not very considerable. But I know a great many people in receipt of pensions, who have no business connections here and who have gone over to the other side simply because of the additional income tax here. I know that one of the things cast in my teeth in the North was that they have no intention of coming in where they would have to pay an additional 6d. in income tax. Therefore, from the point of view of even the political situation, I think it would be an advisable thing for the Minister to reduce the income tax. From the point of view of revenue, I think he would have been a great fool to make any reduction owing to our present financial position.

I want to say a few more words on another aspect of this question. There has been a great deal of discussion as to whether people who had British investments were going to get back a share of the income tax from England. I have a little money invested on the other side, and I sent in a claim on the 6th April. This morning I received £7 more than I had made a claim for. It had been thrust down my throat over and over again that I was going to pay double income tax, and that I need not think otherwise. But I did not pay double income tax. Within three weeks of the sending in of my claim, I received an amount in excess of the amount I claimed.

Resolution put and agreed to.