The Dáil was considering yesterday Resolution No. 6, amendment by Deputy Cooper, in Resolution No. 6, line 33, after the word "clogs" to insert the words "exceeding the value of 10s." The debate on the amendment was adjourned until to-day.
THE DÁIL IN COMMITTEE. - FINANCIAL RESOLUTIONS—REPORT.
I would ask the leave of the Dáil to speak again on this amendment, because it is rather ridiculous that an amendment that was proposed nearly 18 hours ago should be put without further discussion. I will try to summarise the arguments both of the Minister for Finance and myself as fairly as I can. The Minister for Finance objected to the amendment, in the first place, because he said it would not fulfil the purpose for which I intended it, that while I intended to exempt boots and shoes for children, a large number of boots for adults would creep in under the cover of it, and he suggested, instead, that I should substitute some proposal to exempt certain sizes of boots and shoes from the provisions of the duty. The Minister also told us that the importers of boots and shoes were wicked men who would probably swindle him out of their value. Well, if they mistake the value, I cannot see what there is to prevent them from mistaking the sizes. I do not think it is a practical proposition. If certain sizes of boots and shoes were exempted, we should have Irish sizes, just as in the old days we used to have Irish miles of a special measure of our own. I do not think the solution is to be found in that way, but, at the same time, I see the force of the Minister's argument that I have fixed the figure of exemption too high at 10s. per pair. I was not, I admit, thinking when I framed the figure so much of the wholesale as the retail trade. I think an amendment providing for an exemption of boots and shoes of the value of 5s. a pair, and less, would be acceptable, and I would be perfectly willing to accept that as a compromise; but I have no hope. The Minister has hardened his heart, and he has definitely said that this Budget of his, and his proposals, discriminate against the father of a family. That is the attitude he has chosen to take up, and I regret it. I wish I could convince him that the fathers of families are to be encouraged rather than discouraged, that the numerous expenses that bear on them that do not bear either on bachelors or old age pensioners might be considered. But I know the Minister; when he has taken up an attitude, he has taken it up, and, therefore, I shall be compelled to put this proposal to the vote, though not necessarily to a division.
As the father of a family, Deputy Cooper has brought tears to my eyes and sorrow to my heart that they should be so badly treated as in this Budget, but I do think that making a line, no matter what it is as regards the value, that you must on that border line create a tremendous amount of difficulty as between, say, 4s. 11d. and 5s. 1d. in the one case, or 9s. 11d. and 10s. 1d. in the other. And, of course, an article that was on that border line would be treated by the Customs very stringently indeed, because it would be difficult for a man to prove his 4s. 11d. value if by doing so he was to deprive the Revenue of a certain sum. Our experience of the Revenue authorities is that they are a very estimable body of men, but you are not going to make much out of them. That is my main objection to the lines on which Deputy Cooper has put down his amendment. The Minister for Finance said if there is any way to be found whereby he could give him relief without costing him anything, he will consider it, so that I think we might leave it in his hands to see how he can manage the position.
I am content to leave the statement of the case to Deputy Bryan Cooper and Deputy Hewat.
Amendment put and declared lost.
I move Amendment 9: To delete the words "shaped soles, shaped heels and" from the provisions of the Financial Resolution. This is intended to help the boot repairing industry, and also, to a limited extent, the boot manufacturing industry, because the Dáil should remember that this tax on shaped soles and heels coming into the country, is in essence a tax on raw material. These are the raw materials of the boot repairer, and to a certain extent of the boot-maker. I do not say that they are raw material in the rawest stage, because the manufacture of boots has always been complicated to the student of fiscal questions, for nobody can say what the raw material is. The boot-maker says the leather is the raw material, and the tanner says, "No, the hides are the raw material," and you invariably get a conflict of opinion, and a conflict of desire. It is quite certain that with such industries as we have here at present the importation of soles and heels is necessary. I do not know if the Minister knows or has ever seen what he is going to tax. This is a shaped heel, and this is a shaped sole that the boot repairer imports, and this is a shaped sole which the Irish boot manufacturer whom the Minister wishes to assist imports in order to assemble his boots at the cheapest price. I do not think that all soles used by manufacturers are imported, but my information is that a considerable percentage are. The object of this duty on boots, as far as I understand, is to give employment. Now, very little employment is given by the manufacture of these soles and heels, and I am informed by authorities—the Attorney-General is not here; I know he always wishes to know my authorities and my authority is a statement issued from Northampton by the Boot-making Trade Union—that a man cutting up three-quarter soles gets 11½d. for 100 pairs. I am waiting for the Labour Benches to cry "shame," but it is a fact. The machinery is so perfect, and the work done by skilled men proceeds so quickly, that a man working on that basis of 11½d. for 100 pairs can earn £5 per week. Two men at that wage can turn out in a year 1,000,000 pairs of soles. I do not know how many pairs would be required in the Saorstát, but I cannot conceive that it will be more than 3,000,000. If so the industry the Minister is protecting will employ six men.
Can the Deputy go further and tell us the cost of leather and the price of the sole when finished?
I regret I cannot. The cost of the leather is a very important factor. I am only dealing with it from the point of view of the employment that would be given by the actual turning out of those shaped soles and heels. The cost of the leather is a constant factor. It does not matter whether the shaped soles and heels are turned out here or in England, so far as that is concerned. There is no tariff on leather. The English manufacturer and the Irish manufacturer will have to pay the same for their leather. I am dealing with the question of how much employment is likely to be given by the setting up of factories here to turn these things out. That is the ultimate justification for the tax on boots. Boots are not a luxury. It is only to give employment to our people we are imposing this duty. I do not believe this exemption will deprive the Minister of much revenue, because these are not very expensive articles, and they are not sold at prices which would enable them to be manufactured here and give employment. I do not think any factory will be set up here to turn out this sort of article. A factory for this sort of work requires to be run on a large scale, if it is to be made pay. I am not sure that our population offers a sufficient demand for this output at present. Until the Irish tanning industry is revived a good deal of the raw material would have to be imported from England, entailing extra cost of carriage. As the Minister knows, a good deal of the raw material particularly for uppers, and even shaped uppers, is imported from England by the small boot factories there and here. I do not think any harm will be done, either from the revenue point of view or the employment point of view, by the acceptance of this amendment. It will also help to clear up one or two anomalies, such as the taxation of leather soles and heels, which we do not produce and are never likely to produce. I would, therefore, urge the Minister, if it does not go too severely against his Budget scheme, to accept the amendment.
I formally second the amendment.
I only rise to welcome a new recruit to the ranks—Deputy Bryan Cooper. He has now advocated free soles for the people, and I think has gone somewhat in the direction of a Free Trade policy, which I, as one of a very small minority here, advocated. He must realise, of course, that the feeling of the Dáil on this matter was that you were going to have an experiment in protection. And anything that works against that, I am afraid I could not support, although I was on the anti-Protectionist side.
I must oppose this amendment, because I do not see why, if we are going to put on this tax, we should go in for it in a half-hearted manner. If a tax is going to be imposed, it should be imposed in a way that will give a proper trial to the experiment when the time comes. If Deputy Cooper pays another visit to Wool-worth's he may see something else he can bring here as well as the articles he exhibited this morning.
I would like more information on this matter. I look through the report of imports of leather for two months, and I do not see any considerable figures relating to the import of prepared soles and heels. I am inclined to think that the encouragement of the importation of goods, samples of which Deputy Cooper has exhibited, accounts for some of the rheumatic troubles and bad boot troubles that Deputy Sir James Craig spoke of recently. The quality of leather that is likely to come into the country in that form, I think, would be poorer in the main, and it gives great encouragement to the handy man to buy cheap soles ready-made for placing upon poor people's boots. I think that, on the whole, without further information it is far better to encourage the importation of the large piece of leather, which can be better tested and judged by the person skilled in the art of leather-working. I imagine that, judging by the prices that have been charged even for these cut soles, there has not been any considerable advantage, notwithstanding the big output It is better that the soles should be cut directly from the hide and that encouragement should be given rather to the expert worker in boot repairs. I imagine, from the samples Deputy Cooper has shown us, that the tendency has been to supply the ready-made soles of indiscriminate quality to any person who likes to apply for them. They will set themselves up as boot repairers, and, while paying excessively for overhead charges, will charge the same price to the consumer as a competent boot repairer cutting his own leather would be able to supply the consumer at. Unless Deputy Cooper is able to bring further evidence, more weighty than he has adduced, in favour of his amendment, I shall vote for the Minister's proposal.
I wish to oppose the amendment on two grounds. Firstly, Deputy Cooper referred to the small amount of employment given. But if it is a small amount, it is better for us to have the benefit of it than the foreign manufacturer. I understand that those soles are not made in the wholesale way Deputy Cooper suggests. I was in a small boot factory in Sunderland, worked by an Irishman, and I saw those soles cut out of sheet leather, worked in a very simple way. Each factory in Ireland might like to cut out its own soles, in order, as Deputy Johnson says, that they should see the sort of stuff they are getting. The second point on which I would oppose the amendment is, that if the soles are made in England, then the market for leather will be in England. It would be far better to have the market for leather here in Ireland, where the home maker of boots could buy the leather in the large piece. Even if it is of small amount, it is better to have the work done in Ireland and give the experiment a fair chance.
I do not agree with either Deputy Johnson or Deputy Sears. I do not think the object they have in view is the giving of employment. They speak of the difference in the leather and the market for the leather. Surely, if the market for the leather is in England, it makes no difference to us whether it comes over to us in the form of shaped soles or in the half-hide. The only difference it will make is that the soles will be cut there by machinery, which will enable the people of this country to get their boots repaired at lesser cost. There will be less waste. If Deputy Johnson's object is to have a close corporation for the repair of boots in this country, it is very important the people of the country should know it. He wants a close corporation for the expert boot repairers. He is a very poor boot repairer who cannot make an effort—even a clumsy effort—to cut a sole. If he is going to fit it on the boot at all, he must be a very poor repairer if he cannot cut it out in the first instance. I do not think Deputy Johnson or anybody else will say that these cut soles, sent over as they are, can be put on without giving work to the repairer. I do not believe, except in very few instances, that one of these soles will actually fit the boot. It might be too big in the toes. It cannot be put on as it is. I think the amendment of Deputy Cooper is a sound amendment. It will enable the Irish people to have their boots repaired more cheaply than they would have them repaired under the other system. It will mean less waste, and generally will be more economical. Do not put the tax on leather in one form and leave it off in another. I do not see why there should be this discrimination between two different forms of leather.
I am afraid the last speaker does not clearly understand the problem that is before us. In putting on the tax on boots, as I understand the proposal of the Minister, not alone is he anxious to develop the boot industry, but he is also anxious to develop the leather industry, which is an important part of the boot industry. What the last speaker is anxious for is that we should admit leather soles free, which means that the demand created by the local industries will be met by the supply of these free soles from the other side. What we are really anxious about—and it is really in the interests of the farmer—and what grates on so many of us commercial men at the moment, is that we see every day on our quays these hides which are valuable raw material, being sent to the other side to be prepared and used up there. What the Minister desires, and what the Dáil is really anxious for, is that factories should be set up at home to prepare the raw material and thereby give employment. Furthermore, that boot factories should be set up to create a demand for that home prepared raw material. If this amendment is passed it will strike at the root of this experiment. It is really an essential part of the experiment.
It has been mentioned here in the course of the debate that in years gone by we had all over the country tanneries which one would expect to find in an agricultural country like ours. These tanneries have all left us, with the boot industry. In our anxiety to re-establish the boot industry we are also anxious to re-establish the tanning industry. I would ask the Minister, if I might use the expression, to put his heel on these free soles and thereby help the tanning and the leather industry.
It is extraordinary the amount of help the farmers are going to get from these tariffs, all indirectly. We have not got yet one direct tariff to help our industry. I maintain that Deputy Good is on the wrong track altogether with regard to the advantages to be gained by the farmers from the tanning industry in this connection. There is no tariff to be imposed on imported leather, and are we to take it that Irish tanneries will start to work on the hides that we hear so much about, on the off-chance that boot manufacturers will buy the leather manufactured from Irish hides. We hear a lot from the boot manufacturers and other manufacturers about the things they will do when they have Protection. We hear that they will not increase prices, but I have not the slightest faith in their promises. I have not the slightest doubt that these boot manufacturers will buy their leather in England, Scotland, France, or any other place where they can get it cheapest, and that the only possibility the Irish tanneries would have of having their products absorbed would be to sell them more cheaply than the English leather. That is a position they are not in at present, and it is not a position they could hope to be in unless the tariff is applied to imported leather. There is no intention of having that done, and I believe that Deputy Good's argument is worthless on that account.
I am opposed to this amendment because it has been stated here very frequently that this is in the nature of an experiment. You cannot make an experiment if there is any loophole. I was in the first instance very much upset by the idea that three shillings in the pound were going to be added to the price of boots, but during the discussion we had no less than three different statements made that assuaged my fears very much. Deputy Sears told us that there was no question about it, that the boots would be no dearer. Deputy Magennis, who knows everything, told us that at least sixty per cent of the duty was paid on some of the motor cars that we brought here, and Deputy Johnson made what seemed to me to be an extremely commonsense statement yesterday, that the firms on the other side who had retail shops here would take care that they would be able to compete with the boots that would be made here. For that reason he did not think that there would be a great increase, at all events in the price of boots. As I said, I was greatly perturbed in the first instance with regard to this duty because of the children, particularly in the country districts, where in the winter time they have to traverse probably three or four miles of road in going to school. For that reason I stated that this was the most severe knock-down blow of any of these protective tariffs. In view of the statements here that the boots are going to be no dearer, I am perfectly satisfied to go in for the experiment in full.
Are you satisfied with the guarantees you have got?
These are honourable men, and I am quite sure when they make statements in the Dáil they will be carried out. Deputy Magennis is the only one who assured us that he was a true prophet. He stated he was perfectly certain when the motor duties came on that these duties would not add to the price of the cars. I hope that is the case. I say again if we are going to try an experiment, let us have the experiment in full and have no humbugging about it.
Deputy Good, in his anxiety for the development of agriculture deplored the export of hides from Ireland, and he, the protagonist and exponent of the business people, could not see his way to deal with those hides in such a way as to be of use to the people of Ireland. He could not invest his money Why? He says it is deplorable that they should be exported now. It is not for the farmers to show him why. We produce the raw material, and we sell in the open markets of the world. We do our work. We are not prepared to allow ourselves to be taxed to bolster up any industry. If the exponent of the business men of this country who deplores the exporting of raw materials cannot explain why it cannot be done in this country, it is not for me to do it. I do hold that anything that takes place in the nature of a tariff is going to operate against our industry and we will oppose it, and oppose it in every degree.
Stress was laid by one of the supporters of the amendment, and I think also by Deputy Gorey, on the fact that there was no protection for leather. So far as leather from Irish hides is concerned, may I say, to repeat a phrase used by Deputy Cooper yesterday, that under the new tariff it will enjoy a natural protection. At present Irish hides leave this country; they are turned into leather in England, and they are made into boots, and they come back to Ireland. At present you put a tariff on hides going to England and on boots coming back, and if the hides are tanned in Ireland you will have a natural protection for Irish leather and anything that hits at this particular natural protection should not receive support. The only other serious thing in Deputy Cooper's motion is the bringing in of specimens to the Dáil. Where is that going to stop? If the Minister proposes a decrease in the tax on whiskey, and if Deputy Sir James Craig proposes an Anti-infectious Diseases Bill, what will be the effect on the Dáil?
I do not propose to accept the amendment. I do not think that Deputy Cooper really made out a case for it. So far as the village cobbler goes, in many cases he frequently does cut out the sole he uses from the half hide of the leather, and as far as the boot manufacturers are concerned for the reason stated by the Deputy, I think it is most desirable that they should take up the work of cutting out the soles here. I do not want to get out of order on the question of protection or of the tax on leather, but I say this, that the preliminary to doing anything to encourage the manufacture of leather here is to try and get the boot industry upon its feet. If you had a big boot industry here, then you could talk about doing something for leather. It is desirable that manufacturers here should take the sole leather from the tannery and cut it up. If they are not encouraged to do that then there is no reason at all why they should have to buy Irish leather. As a matter of fact if the cutting up is to be done in England Irish tanneries will be at a disadvantage, and I cannot see that this will seriously affect the village cobbler, and so far as it affects the boot manufacturer it affects him in the direction we desire in this experiment.
Amendment put, and declared lost.
Amendment No. 10. is merely a drafting amendment, and on further consideration I do not think it is necessary and do not propose to move it.
Amendment 10 not moved.
Question: "That the Dáil agrees with the Committee in Resolution No. 6"—put and agreed to.
Resolution No.7 has already been agreed to.
RESOLUTION No. 8 (SOAP, SOAP SUBSTITUTES, AND SOAP POWDERS).
"That a Customs duty of an amount equal to 10 per cent. of the value of the article shall be charged, levied and paid on all soap, soap substitutes, and soap powders imported into Saorstát Eireann on or after the 1st day of July, 1924."
I beg to move amendment 15:—
In Resolution 8, line 44, after the figures "1924" to add the words "in addition to any duty which may be chargeable in respect of any spirits contained therein."
The purpose of this amendment is to provide for a charge on the spirit duty in respect of any of the small quantities of soaps that contain spirits. These soaps are at present chargeable in respect of whatever spirits is contained in them, and the object of the amendment is to continue that particular charge and not merely to substitute for it this special duty. It means that soaps that contain spirits will be in the same relative position to soaps not containing spirits. There will be a dual tax upon the spirit.
May I ask the Minister if he will give us some information as to the tonnage or quantity or weight of the soaps and soaps substitutes imported, and would he explain what he expects in the way of revenue from this motion or if there is any revenue, and would he give us some information as to the possible effect of the imposition of this 10 per cent.
The Minister will answer that on the main question.
Amendment put and agreed to.
I move: "That the Dáil agree with the Committee in the Resolution as amended." It is not anticipated that there will be any revenue, or, at least, any revenue that will be worth taking into account, as the result of the imposition of this duty. The duty is a small one, and the effect of it will not be very extensive. The value of the imports of soap is something like £300,000 a year. The number of men employed will only be a few hundred, and the effect, in any respect, of this particular tax will not be extensive. It is felt, so far as the ordinary qualities of soap are concerned, that there is no reason whatever why manufacturers here should not supply the needs of the country without any increase in price. We know that in several cases, in the most important cases, they are associated with an outside combine. They are able to obtain their raw materials on terms that will enable them to supply the needs of the Irish market without imposing any extra charge whatever on the consumer. My opinion is that that will be done. In somewhat parallel cases, we know that it has been done The case here is very similar, except that we have factories already here. The case, I say, is very similar to the case of the cigarette manufacturers. When the duty was imposed on cigarettes, firms which had been doing a big trade here set up their factories to make for the needs of this market within the tariff, and without charging anything extra to consumers. In the case of soap, there is an arrangement already in existence whereby the greater part of the soap manufacturing industry in this country is in some way associated, though I do not profess to know in what exact degree, with outside combines. The belief is that the result of the tariff will be that factories in this country will be used to a much greater extent in the future than they have been used in the past. At present they are not being used, I should say, to half their capacity, and if the factories are used up to their capacity they can, I believe, supply the Irish market—that is, with the ordinary sorts of household soap
So far as toilet soaps are concerned, there may be a certain amount of revenue collected. There are not materials available at the moment to distinguish between toilet soap and other soaps imported, because there has been no segregation of the figures, but, as I say, some little revenue may be collected from toilet soaps. We may have new manufacture of toilet soap taken up, and we may have firms which do manufacture toilet soap at present, to some extent, taking up its manufacture on new lines, especially on lines that are, perhaps, a little more expensive. In so far as the manufacture of toilet soap is taken up, there will be a fair increase in the amount of employment. My anticipation in this matter is that we will give employment to a few hundred people, and that we will be able in this particular case to have that employment given without cost to the consumer. There is absolutely no reason why there should be any extra cost in this particular case to the consumer. We believe that that can be done, but we do not anticipate that any appreciable revenue will result. There might be a few thousand pounds, but certainly there will be nothing appreciable in the matter of revenue. This is simply taken on as one line where, we believe, as a result of the tariff, that employment can be given at no cost to the general public. The tax is not of great importance. It is not an industry in which very large numbers are employed, and this will not lead to large employment, but I think it will lead to some appreciable employment.
In view of the explanation given by the Minister, I do not feel inclined to press opposition to this resolution, because I think it fulfils all the requirements of what a protective duty should be, if we are to have protective duties. Like the Minister, I am, to a certain extent, in the dark about the actual conditions under which soap is manufactured in this country, and I find it very difficult to get information on the point. A great number of the soap manufacturing industries in Ireland are in the hands of the Lever combine, and apparently the Minister hopes to get the combine and the people with factories in Ireland to manufacture soap and sell it at a price not higher than the price prevailing at present. If such be the case, and I take it that the Minister is convinced that it will be the case, I do not see how I can offer any opposition to this resolution, because I am certainly anxious to do all I can to encourage industry and the giving of increased employment, provided that encouragement does not result in a tax on those whom I represent here.
I am a little doubtful whether this ten per cent. duty is sufficient. I have a vivid recollection of reading, some years ago in a Canadian trade journal, advice it gave to its readers in the soap trade. It advised them to try to attempt to capture the British market, and it instanced shaving soap, and explained for the trade readers of that journal how a packet of shaving soap is sold in the British market at 1s. 3d. The costings showed that there was so much allowed for retail handling, so much for freight, so much for the package, so much for printing, and so much for the wholesale distribution, and finally we had the item cost of the soap at 1½d. I do not know how far that applies to many of these soaps except the cruder sorts, but I am inclined to think that it goes a very long way as an illustration of what enters into the cost of these well-advertised soaps. The soap itself costs comparatively little. The handling and the advertising and the package cost the greater portion of the actual amount, and ten per cent. on soap may not be enough except, as I say, in the case of the cruder sorts. I think, though, from what I have heard that the position of the combine is that they have utilised their Irish factories for portion of the work, not the making of the soap, but for the preparation of the material, and the 10 per cent. may turn the balance in favour of finishing the product here instead of transhipping it to England, and re-transhipping it here, as a finished article.
I would like to have some further assurance from the Minister that he is, on inquiry, satisfied that a ten per cent. tax will have the effect he hopes. Otherwise the only effect the duty would have would be to raise the price of soap somewhat, because it will be quite clear that if there is no Irish competition it is easy to transfer the cost of this duty, and perhaps, incidentally, to assist the revenue. I would like the Minister to give us some more information and, at least, an assurance that he has inquired closely enough into this question to give ground for hope that ten per cent. is enough to turn the balance in favour of the Irish manufacturer of soaps imported from England by the Lever Combine.
I have had inquiries made, and I am informed and believe that the ten per cent. will be sufficient. I cannot say that I had an opportunity of going into the matter in great detail myself, but I had it gone into, and I believe it will be sufficient. Whether it will serve in the case, say, of highly advertised shaving soap, I do not know, but at any rate it will give some opportunity to any person who cares to start the manufacture of shaving soap here to get on his feet.
AN LEAS-CHEANN COMHAIRLE took the Chair.
Will the Minister say whether the duty of ten per cent. will be levied on the soap value, or ten per cent. on the package?
I think it will be on the soap, but I would like to be sure of the Customs procedure. I take it, however, that it will be on the value of the soap.
That is a very important question, inasmuch as if the example I quoted is anything like a fair one, or even if it is exaggerated, ten per cent. on an article which is sold for 1/3 is very little, but if the package of soap is the article to be taxed, it would make all the difference in the world.
I can only promise to have that matter looked into. We did consider the question of a higher rate for the more expensive toilet soaps, but we felt that there would be a great deal of difficulty in an ad valorem duty, that the flat rate is so much simpler, and that in imposing a number of new taxes for an insufficient amount it is better to stick to the one rate rather than have differential rates. In the case of special varieties of soap, we would have a ten per cent. ad valorem rate. There would be higher rates when dealing with these special toilet soaps. The value really is in the advertising and having the trade, but it was felt that that would introduce a complication that would not be justified in view of the results in present circumstances.
Question put and agreed to.
RESOLUTION NO. 9.
I move that the Dáil agree with the Committee in the following resolution:—
That a Customs duty of an amount equal to ten per cent. of the value of the article shall be charged, levied, and paid on all candles imported into Saorstát Eireann on and after the 1st day of July, 1924.
The firms which are engaged in the manufacture of soap are mostly also engaged in the manufacture of candles, and the case is much the same as that for soap. Machinery enters into its manufacture a great deal, and the number of employees will not be very large. It is again a case where we feel that the extra employment can be given without an increased charge.
The same statement which I made with regard to soap practically applies to this resolution, but, if anything, I am more emphatic with regard to the necessity of maintaining the price of candles at their present level. If I find the price of candles has increased, I will call it to the Minister's attention. I believe that this is a matter which will affect the very poor people living in out-of-the-way parts of the country who have not the advantage of gas or electric light. Candles are a considerable source of expense to them, and are an absolute necessity of life. I think it would be very inadvisable if this impost should find its way to the users of candles. I will take it for the present that the price will not increase, and we will see what happens in the course of time.
Before the Minister replies, I would like him to apply himself to this particular aspect of the question. If the price, by reason of this combination of outside interests with our internal factories, is not going to be increased by reason of the ten per cent.—and there is a doubt whether that ten per cent. will be sufficient to induce outside manufacturers to manufacture here—why is the Minister afraid to put on 33? per cent., as happened in the case of tobacco? If that point of his is correct, it can have no more effect than if it were 100 per cent. We would like to see the Irish factories working to their full capacity. We know that the raw material, by reason of the combination, can be brought here at first cost, and, therefore, there should not be any increase in the price of the article. Therefore, it is reasonable to think, if there is any doubt about bringing these people here to work, that he should not be afraid to put on a tariff at such a price— although we are Free Traders—to insure his revenue, provided he gives us cheap candles and cheap soap.
Supposing it was 33? per cent., I would not like to put any temptation in the way of workers in factories. If they saw that the duty was 33? they might well say: "If the price can be put up our wages can be put up." I would rather keep the duty down to a minimum than to put it up.
Question put and agreed to.
I move that the Dáil agree with the Committee in Resolution No. 10:—
"That Section 8 of the Finance Act, 1919, shall cease on and after the 26th day of April, 1924, to apply to unmanufactured tobacco, and on and after that date the Customs duty on unmanufactured tobacco shall in all cases be charged at the full rate of duty applicable thereto.
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 is one which will give the Irish tobacco growers a chance of extending their operations and of putting what has been an experiment so far on a very permanent basis. I do not believe that Irish tobacco will ever live. I do not think it is in the same case as the other articles that have been dealt with heretofore. In regard to these other articles I would anticipate that at a certain time the tariff could come off. I do not believe that this country can at any time in the near future afford anything that approaches a general tariff. I think that where we do give protection to an industry we must give it with the idea of enabling the industry to establish itself, and when it has established itself a time should come when it should be able to stand on its own feet without the assistance of a tariff. I do not think there is a shadow of a chance that tobacco growing could succeed here if tobacco had to be sold on the open market at the same price as the imported stuff. On the other hand, I do not know that even with the degree of protection we are giving it is going to extend to such an extend as to mean a serious drain on the revenue. I am told it may extend quite considerably and give a good deal of rural and agricultural employment and be beneficial in that way. At any rate my feeling about the matter is that if we can afford to give a specially reduced rate to growers in Nyasaland there is no reason why we should not give that reduced rate to our own growers here.
Especially when they are farmers.
I do not know whether this thing will be received with any gratitude by the Farmers' Party, but I think it must represent all that we can reasonably do for the tobacco industry here. The amount of this rough class of tobacco used is something less than one-tenth of the total consumption, and I do not know whether it is going to extend very much beyond that. However, the acreage under Irish tobacco would have to extend considerably before it would supply the demand.
I would like to ask the Minister how much he anticipates the revenue will be depleted by reason of this concession. Of course we agree that when we do get a concession, it is a concession, and we say that if it is reasonable to give a concession to the natives of Nyasaland it follows as a natural course that it is reasonable to give it to the farmers of Ireland. On those grounds we are not going to object to the concession. I would like to hear the Minister say how much the revenue would be depleted by reason of this change.
It will not be depleted this year. It will benefit to the extent of £20,000 or so. If the Irish growers put in a reasonable amount of tobacco it may suffer in subsequent years.
Question put, and agreed to.
RESOLUTION No. 11.
I beg to move that the Dáil agree with the Committee in Resolution 11:—
"That sub-section (4) (which exempts certain motor-cars and component parts of motor-cars from the new import duties therein mentioned) of Section 13 of the Finance (No. 2) Act, 1915, shall not apply—
(a) to any motor-cars constructed and adapted for use and intended to be used solely as motor omnibuses or in connection with the conveyance of goods or burden in the course of trade or husbandry, or
(b) to any bodies or component parts of bodies, for any such motor-cars,
imported into Saorstát Eireann on or after the 1st day of July, 1924: Provided that where it is shown to the satisfaction of the Revenue Commissioners that any motor-car, imported into Saorstát Eireann on or after the said 1st day of July, 1924, and on which Customs duty has been duly paid, is constructed and adapted for use and is intended to be used solely as a motor-omnibus or in connection with the conveyance of goods or burden in the course of trade or husbandry, the Revenue Commissioners may, subject to such conditions (if any) as they may think fit to impose, repay such proportion of the Customs duty so paid on such motor-car as they shall determine to have been paid in respect of the chassis and accessories (if any) of such motor-car.
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."
Resolution 11 is simply a resolution charging the 33? per cent. duty, which is chargeable on ordinary motor cars and chassis, on commercial bodies. It is felt that it will be administratively easier in cases where the complete commercial vehicle is imported with chassis and body, to charge a duty and repay on the body, when that has been ascertained. In cases where the duty is successful, and where the chassis is imported without the body, the difficulty would not arise at all.
Question put and agreed to.
RESOLUTION 12.
I move that the Dáil agree with the Committee in Resolution 12:—
Every Customs entry form required by law to be furnished by an importer, or the agent of an importer, of goods into Saorstát Eireann on or after the 15th day of July, 1924, shall bear an adhesive stamp of a value equal to the amount of sixpence in respect of each consignment, parcel, or package of goods mentioned in the entry form, such stamp to be affixed to the entry form by the importer or his agent before the same is furnished to the Customs officer.
I move in this resolution "to insert after the word ‘goods' the words ‘other than a parcel of books.'" This resolution is the one which imposes a sixpenny stamp on every package imported whether liable to duty or not. I am moving to exempt books from that tax, because the more books and the more knowledge we have coming into this country the better. It is a disgrace to Ireland that there are so very few book shops outside Dublin and Cork. In the country it is difficult to buy books in any of the towns, and one has to purchase books at Eason's railway stalls, and it is impossible to get any serious book at all. If we are not going to encourage the numerous people who import books, either from the more expensive libraries which exist across the water or by purchasing them, we are going to do a serious injury to knowledge and learning, and these are things we cannot have too much of, even when they take the form of professors. I think the claim is a reasonable one. I do not think the Minister ever contemplated books as being part of the commodities upon which this duty is to be levied. I have seen it suggested that imported books should be subject to a tax and that we should read only our own books and that we should produce our own books. If the Minister takes up that point of view I may say that I shall put down as many amendments as my ingenuity may devise, and I shall take a division on all of them. Possibly the Minister will not do it, because I think he is sympathetic to the book lover, the person who finds books an integral part and genuine joy of his life, and he will not place a handicap on books, from whatever quarter they come, either from England, the United States or Germany. The Minister may say that the bulk of them comes by parcel post and would not come under this duty. They do in most cases, but not in the case of shops which buy books, as they have them sent by rail. They do not do so in the case of books which come from the big London libraries and which are sent here in boxes by rail. Another class that will be hit if my amendment is not carried is the public libraries.
Rathmines and places like that, who buy books on a fairly large scale, or who ought to if they are fulfilling their functions adequately, will suffer. Therefore, I ask the Minister to make this concession. It will cost him very little revenue. It is not a very large amount; the classes who buy books and the institutions who buy books are not really the wealthy classes. It will make much difference to them, and will make little difference to the Minister and to the Government.
If it has been decided, as was pointed out, that we are going to tax sweetness, cleanliness and light I hope the Minister will see his way to concede this point raised by Deputy Cooper, and decide not to tax intellectual light. I do not think it means anything appreciable to the Revenue, and I agree with Deputy Cooper that it will mean a great deal to many readers of books. I trust the Minister will not be disposed to raise any great difficulty in the way of accepting this. But I confess I see some difficulty ahead in view of this amendment of Deputy Cooper's. What probably the Minister will be able to say is that the next amendment is unnecessary. I trust so, but as it refers to books coming by parcels post perhaps it will not be really necessary to put in such a clause. But in the words that are before us it appears to be sought to introduce two sets of words after the same word in the original resolution, and which I think would not be possible. On the main point of not requiring books coming in to be liable to this duty even though a small one, I should like to support Deputy Cooper.
I feel that this is an exemption which is not worth asking for. When you are dealing with books that will come in by rail and by steamer and otherwise than through the post the person who is bringing in the books will not be hit to any substantial extent by this particular entry. It is difficult to see how you can give exemption in this particular case and not exemption, say, as to some medicinal preparation and lots of other things. I do not see very well how you can give an exemption in the case of books. Now, there is at present being carried on really a retail trade across these Customs Frontiers, and that administratively, is very costly, and it imposes a great many charges on the State. In the mere matter of compilation alone we estimate that the amount of retail trade alone is so great that it costs £12,000 a year. It costs the State additional in the matter of collection of revenue and the difficulties of examination and all that are very greatly increased and, in fact, I believe it is bad for the State in other ways that there is no encouragement given to people to do a sort of wholesale business here that would be done if this particular small parcel trade were not carried on to the extent it is. People may complain of the Irish shopkeeper and all that, and I believe they complain with a good deal of reason. But I believe it would be much better for the country if there was an opportunity, and an encouragement given to people who might come over here if necessary from the other side to do the class of shopkeeping, a different class of shopkeeping from what is being done here, and to do this sort of thing as well as it is done at the other side. I do not regard it as desirable that we should depend on this business of having individuals sending for small quantities of goods outside the country. I think it it most desirable in every way to have our trade done as the trade of other countries is generally done across the frontiers in some substantial bulk and not in this retail way that it is being done at the present time. In the case of books, it will be easily met where books are sent by post, if they are sent by book post—I think there is a special provision for book post. At the same time I do not see any reason why books coming in, in that particular way, should not be exempt from any postal charge. Even if a charge is made, I presume that some of those books that would have come by post go back and we are intending as a result of the gain in revenue that we should make through this tax to reduce our postal charges by 3d. a parcel. At present they are charged 3d. above the British level, but we hope to bring them down to the British level, so that everybody in returning the books through the post would gain something in that way. I feel that it would be very difficult to make an exception of books in this way when we are dealing with the charge on Customs entry. I think that a good case could be made for putting it on other things, but then a degree of complication would arise that would be almost as bad as the complication that arose from the multitude of small parcels. Our Customs authorities have to deal with almost as many separate parcels and consignments as the British which have an enormously greater volume of trade to deal with.
In view of what the Minister said, I withdraw the amendment.
Amendment, by leave, withdrawn.
I beg to move:—
In Resolution No. 12 to insert after the word "goods" in line 26 the words "other than a parcel sent by book post or parcel post."
This amendment is quite different; this is on all parcels, whatever the contents may be. As Deputy Thrift warned me, I expect the Minister will say that this amendment is redundant, that he does not propose at present to impose 6d. on all parcels sent by post. I think he has the power by the stroke of the pen to impose it, because all parcels on which a Customs entry form is required to be furnished are to be taxed. At present parcels sent by post require a Customs declaration, and not an entry form. If he will assure me that he has not got the power without coming to the Dáil to alter that provision and require a Customs entry form for every parcel, I will not proceed with the amendment. But if he has the power that he suggested it might be necessary to deal with the proposal. He suggested it more than once. I want him to have to come to the Dáil for authority before he does so.
I may explain, when I said that something must be done in regard to the parcels post, that it will be done in an entirely different way. It will be done by an order made by the Postmaster-General and consented to by the Minister for Finance fixing the postal delivery charge, but there is no intention whatever to alter the arrangement with regard to Customs and postal traffic. There is no intention to require the Customs entry for parcels sent by post. The matter will be done in an entirely different way.
Will the Order be laid on the Table of the Dáil? Will it be open to have a discussion on it?
Yes, it will be open to the Dáil to discuss it. It is part of the ordinary commercial arrangement of the Post Office. The Postmaster-General is carrying on a trade in connection with these charges.
Is that an undertaking that the Dáil will be given an opportunity of discussing it?
I will undertake that.
Then I withdraw the amendment.
Amendment, by leave, withdrawn.
Question—"That the Dáil agree with the Committee in Resolution 12"—put.
On the introduction of these Resolutions I took exception to this matter. I think it is a mistake on the part of the Ministry to introduce these obstructive taxes. It is undoubtedly intended to hinder the importation of articles from outside. The Minister referred to the Customs frontier. I do not know whether he meant the northern frontier or the whole frontier of the country; I presume he meant the latter. It seems to me that up to the present there has been no obstacle on the part of Irish traders getting these things in, in bulk, supplying them in the ordinary way, and then competing with outside suppliers. This is simply another method of obstructing the importation of these goods, which come in in small parcels, and thereby making the articles dearer to the Irish consumer. I think the whole tendency of modern development is in the direction of encouraging trade and commerce with outside nations, but this will now have the opposite effect and will discourage it. In any case there are many things which would come in by this system which could not be manufactured in Ireland, and if procured in Ireland could never be procured by getting them across in large quantities. Their distribution is effected in Ireland by the higher postal rates. I believe there are cheaper postal rates in England. The cure for that would be to reduce the rates to the level of England, and then the Irish traders could compete with the outside firm. I do not see any reason why they should not without this obstructive tariff.
The Irish bacon and butter producers will compete on level terms with Siberian, Danish and New Zealand bacon and butter——
We are doing it.
That will continue, and if Siberian and Danish and New Zealand articles can compete to greater advantage in the British market, then Irish producers of these commodities will go to the wall, and what will become of Ireland? That is the nature of the argument which Deputy Heffernan has been using fifty times in this discussion. But he let fall a remark about Post Office services: "Put the Irish distributors on level terms and, if necessary, reduce the charges made by the Post Office." Deputy Heffernan on other occasions insists that the Post Office loss is too great and that there must be economy in the postal service. Now, he cannot have it every way. Deputy Heffernan may have heard of the practice that has been developed of sending postal packets across the Border to be posted across the Border for distribution within this country. The effect of this is to hand over certain postal revenue to the people in Northern Ireland or in England and impose upon the Irish postal service the greater portion of the cost of the distribution of those packets. I anticipate the effect of this motion will be to encourage the distributors of small parcels to send large parcels here and to pay the Irish postal service for delivering them. That will be to the advantage of the Irish postal revenue and to the advantage of Deputy Heffernan's constituents.
The practice of widely distributing small parcels by post from English retail shops, shopping by post practice, has grown very rapidly during the last few years. One sees columns in the morning papers and the weekly papers. Great sums of money are paid to newspapers for the purpose of advertising these shops who do shopping by post business from English houses. They utilise Irish postal facilities for supplying goods to the advantage of the English traders. The Irish postal service bears the cost, and no Irish interest is served except that of the newspaper proprietors. I expect that one result of this action will be to alter that. We may have the same amount of advertising, but instead of parcels coming up to half-a-crown or 10/- or £1 worth, we will have one substantial consignment that will come up to £100 or £1,000. These will come here, they will be repacked here and sent to the country and the Irish Postal Service will get the advantage of it. That will be a distinct advantage, and it will be at no cost to any person except to the British distributor.
Question—"That the Dáil agree with the Committee in Resolution 12"—put and agreed to.
RESOLUTION 13.—CUSTOMS.
Where, on or after the 1st day of June, 1924, the Customs duty on any individual class of goods liable to any Customs duty contained in the one consignment or parcel would, when computed according to the laws for the time being in force in relation to Customs duties, amount to less than two shillings and sixpence, such customs duty shall be charged on such goods at the fixed minimum sum of two shillings and sixpence.
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.
Question—"That the Dáil agree with the Committee in Resolution 13"—put and agreed to.
RESOLUTION 14.—INCOME TAX.
(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.
The following is my amendment:
In Resolution No. 14, lines 41 and 42, to delete the words "five shillings," and substitute therefor the words "four shillings and six pence."
I would like to ask your ruling on this matter. If I press this amendment now in the present stage will you rule me out of order in putting forward a similar amendment when the Finance Bill comes on? I have not had an opportunity of discussing it here as it should be discussed, it not being in Committee.
The question can be raised again on the Finance Bill, and you can also discuss it here.
I do not intend to elaborate this very much, but I think it is well worth the consideration of the Minister to endeavour to reduce the income tax in this country to the level of that prevailing in England. I think it is generally acknowledged that high income tax is detrimental to trade and commerce, and also that it is a fact that the actual payer of the high income tax is not in the final issue the man who pays it originally, and that there is a tendency to have it added to the price of the articles that are consumed.
That is, the manufacturer, the middleman or the trader adds the higher amount of his income tax to his ordinary working expenses and thereby adds it to the cost of the article which he sells or manufactures, and eventually it percolates down to the consumers, who are, as I have said many times before, to a large extent members of the farming community. In view of that fact, I think it might be well worth the Minister's while to consider the reduction of this tax, and although doubtless he will say that the State cannot afford the loss of revenue which would result, I think it is quite possible that he will find that owing to the easier collecting of the revenue and the fact that trade will be stimulated, it will not suffer to any great extent. Incidentally, I might mention, for those who are interested in and probably know a great deal more about the political situation across the Border than I do, that having the income tax on the level that prevails across the Border might considerably facilitate the settling of differences which have arisen, and might help to wipe out that unfortunate Boundary which now exists.
I support Deputy Heffernan's amendment. As I stated on a previous occasion, I was extremely sorry that the Minister for Finance had not seen his way to make a reduction in the Income Tax. I said I believed at that time that from the point of view of revenue it would be a foolish thing to do, but that from the political point of view I thought it would be an extremely wise procedure. I am quite sure that the revenue has lost a great deal by the fact that numbers of people left the Saorstát because of the increased Income Tax as compared with the tax in Northern Ireland and in England. I say that people who had no ties here left the country in very large numbers, and I think I might safely say that these people would be prepared to come back again if the Income Tax were reduced to the same level as in England and Northern Ireland. Business people have told me that business will not prosper until there is a reduction, and I want to put the case from my own standpoint in particular, because it is not often put from the professional man's standpoint. I am not now speaking merely of the medical profession, but of all professions, where men are making an income of a certain amount. If those men get ill their incomes, in many cases, cease; if they die they have neither a business nor a farm to leave behind them. They have nothing either to keep themselves in their old days, or when they are sick, or to leave behind to support their wives and families afterwards except the money they have been able to save.
Insurance.
The insurance would need to be for a very large amount to keep people in these days. Very few people are able to pay the premiums on an insurance sufficient to support a wife and family afterwards. I know, at all events, what is happening in the medical profession from day to day. Young men who are cut off, perhaps before they have had time to lay aside any money for their support, are leaving their wives and families unprovided for. Coming back to the point I was trying to make, as I say, in the case of professional men, many reductions are made as regards their earned incomes. Of that I have no complaint whatever to make, but what I do say is that when a professional man comes to live upon his unearned income, his hard-earned savings, 5s. in the £ is taken, and that is a very serious matter while he is ill or in his old age, and a serious matter for his family afterwards. I put it, therefore, that a reduction of 6d. in the £ would mean a great deal, not only to business men in trying to increase their business, but to professional men possibly more than any others. Income Tax has never been a very fair tax because, I regret to say, there are honest and dishonest people in this world, and the honest man has always suffered at the expense of the dishonest. I would give an instance which comes to my memory at the moment. I met a gentleman on one occasion. I will not say what his profession or business was. He told me that he had been earning £800 a year and I said: "That is a very good income indeed for you." He said: "I have only paid £5 Income Tax." I asked him how did he succeed in doing that and he said he had put in £300 for a motor car. I said: "But you have not a motor car," and he replied: "No, but I put in £300 for one." I am putting that case to show that men who are honest suffer for it, and I put the case again that professional men, in particular, suffer, not so much on their earned income, but in the savings which are the only thing they have to depend on. As I said, I do not see why the prophets should only be on the Government benches. Deputies prophesied yesterday: if Deputy Magennis prophesied with great certainty that there will be no increase in the price of goods, why should I not prophesy now that if the Minister will agree with this amendment he will not lose anything by it?
I would like to support this amendment. It deals with what is really one of the blots on the Minister's Budget. Businessmen have been crying out for several years that it is exceedingly unfair that their businesses in this country, many of which are competitive businesses, should be so severely taxed as they are. Limited companies have been paying this additional burden of 6d. on the Income Tax, and in addition they are paying what is in substance another income tax, that is the Corporation Tax, and the Corporation Tax in the form of Income Tax is a burden to the extent of a further 5 per cent, that is 1s. in the £. The limited companies have to carry a burden in this country at the moment equivalent to 7½ per cent. over and above similar concerns in Great Britain. That in itself is a serious hardship, and one. I think, that the Minister should have devoted more attention to than he appears to have done. Many have drawn attention to the difference between the Budget as introduced by the Chancellor of the Exchequer in Great Britain, and the Budget as introduced by the Minister for Finance here. Practically the Budget here has only left us as we were on the question of the cost of living, because what it has taken off on the one hand on certain duties it has put on in other duties, and it has not freed us from any burden at all in the way of business, whereas the Budget of the Minister on the other side has reduced the cost of living, and also has eased the burdens of the commercial community. Possibly, if instead of the Minister for Finance having to introduce his Budget before the Budget was introduced on the other side, he might say that he was handicapped, but now, being aware of what has been done by the Chancellor of the Exchequer, I think that possibly he might reconsider this matter and see if he cannot help those who are competing and trying to carry these burdens, if he cannot help them to some extent in the reduction of Income Tax.
In speaking on this subject there are many points of view from which one could look at it. I would like to deal with only one or two of them on an occasion such as this. Anxiety has been expressed by all parties in the Dáil that we should encourage the investment of capital in industry. Well, if we want much capital to be invested in industry here, we will have to go outside the Free State for it, and when we look outside the Free State for that capital the very first answer you get is that "Capital invested in your country is penalised to a much greater extent through income tax than it is on this side." That objection, in addition to the other objections which many of us know are sometimes lodged against investing capital in industries in this country, seems to be a very real one. Furthermore, as has been pointed out by Deputy Sir James Craig, it drives people who have capital, and are living on their capital, from remaining in this country and investing that capital here. Many people, as we all know, have left this country for that very reason. Now that things are more settled, and feelings that possibly did exist are to a certain extent dying down, many of these people, I am sure, would be inclined to return to the land they lived in so long, and to renew old associations, if the Minister could see his way to lighten any additional burden they might have to carry, which they avoid by transferring to other countries. One might urge many reasons of that character, and I am sure they have been brought to the notice of the Minister for Finance from time to time. One other point I would like to mention is one that has been drawn to the attention of the Minister for Finance on many occasions. I think on a previous occasion the Minister went so far as to express approval of the proposal, and it was this, that in view of the complications that have arisen over the question of double income tax, it would greatly facilitate the solution of that somewhat difficult question if the income tax in both countries were similar. That is another of the many problems that have helped to frighten those with capital, and those with slender incomes from this country, and anything that can be done in that direction I am sure would greatly help towards bringing those people, and bringing an amount of capital, back again. These may seem comparatively, from some points of view, trivial matters, but I am sure that if the Minister could see his way to grant some relief, even to bring us to the same position as they stand in on the other side, in a short time all those living in the Free State would feel the benefit of that action. I hope he will accept this amendment.
This is Number 14, and the rest of the Resolutions are dealing with taxation upon property of one kind or another. The Dáil has passed 13 Resolutions, many of them imposing taxes upon food stuffs, upon general commodities in everyday use. We have imposed, by inference reimposed, a tax on sugar; we have declined to reduce it. We have reduced the tax on tea, but we have taken away the advantage by imposing a tax on boots, so that these Budget Resolutions are leaving us in the position that all the taxation upon necessaries which has hitherto been imposed is being retained. The amendment is asking us to remit 6d. in the £ from income tax. I do not think the Dáil should agree for a moment to reduce the rate of income tax until the taxes on sugar and tea are very much further reduced, and perhaps, on other commodities of regular consumption. We have not the figures which the Minister has to work upon, and I could imagine the possibility that if this 6d. were taken from the present general rate of income tax there might be additions to the super-tax which would compensate him, but I doubt it. There might be means of altering the incidence of income tax, varying it one way and another, to assist those with lower incomes, but I say without hesitation that to attempt to reduce the tax on incomes while maintaining the tax on sugar would be disastrous and very bad policy. Deputy Heffernan told us to-day, in contradiction to all he so often said, that the tax on incomes is inevitably passing to the consumer. Hitherto the ultimate producer, the farmer, was the man who bore all the taxes, but now the income tax, of all taxes, is passed on to the consumer.
Deputy Sir James Craig followed him with a plea for the professional man. I wonder what Deputy Heffernan would say is the method whereby the professional man is passing on his income tax to the consumer. If we can get some evidence to support that statement I should be very much interested.
The fees of doctors have been increased.
All professional men's charges have been increased.
Therefore, their incomes have risen, and I suppose the payment for income tax has concurrently increased. Perhaps not. But this country is supposed to be overburdened with professional men, and a very large number of persons enjoying incomes are paying income tax on incomes which are unearned. Let us take the very large number of State employes. How do they pass it on to the consumer?
Through the bonus.
I do not know whether the professional man and the business man, the industrial magnates, have succeeded. Possibly they have. They have a way of passing it on undoubtedly, and they may have succeeded in evading the intentions of the income tax laws—in fact, do not pay any income tax. They pass it on. Why are they complaining? If it is true that the income tax payer can pass it on, then I suggest that we should add on 6d. It is not in my power to propose a motion adding 6d. to the income tax. But if I believed what Deputy Heffernan and Deputy Good say—that this income tax is passed on—I think I would risk adding another 6d. and as a consumer I would take my chance that I would save in the bargain. I do not think the income tax is so easily passed on. It is one of the taxes that is not passed on. Perhaps some deputies have made themselves familiar with literature upon land taxation, and they, perhaps, would agree that that is another of the taxes—even more definitely so than income tax—that is not passed on. Deputy Good explained, for the edification of the Dáil, and I suppose repeated what has so often been said, and what I hope Ministers for Finance and Chancellors of the Exchequer will always bear in mind, that, when the limited company is levied for income tax, the charge is made against the commodities produced by the company. Income tax in its inception and in its purpose is the levy of a tax upon personal income, and as a matter of practice the shareholder in a limited company, whose shares have been charged with income tax, gets a remission if entitled to it. So that it is not the company that pays the income tax. The person who is a shareholder, in fact, pays it. But, if it is true, in the business procedure in this country, as in other countries, as suggested by Deputy Good, that limited companies are really the bodies that bear the income tax and not the individual shareholders in those companies, and if it is true, as Deputy Heffernan points out, and I think Deputy Good supports, that those companies, charge the income tax upon the commodities, then I say the income tax laws are being evaded, that the purpose of the income tax which was to reduce, to skim off perhaps, some of the opportunities for luxurious living, for the purpose of meeting State expenditure, is being evaded, and, as a matter of fact, the consumers of the goods, the persons who are being served by these limited companies in one form or another, are, in fact, paying the taxes. If the Minister is satisfied that that is so, then I suggest it is his duty to find a means of searching out the actual person who enjoys the income. I do not think that it is altogether true. I do not think that the income tax is passed on in that way, and while I realise that there is to the investor in a public company, or to the private capitalist, an inducement to sell out and turn his holding into cash and reinvest in another business concern in another country, I am not satisfied that it is desirable that the sugar consumer should be made to bear this burden which would inevitably fall upon the State, if this reduction of income tax was accepted by the Minister. If the money has to be found, then income tax is a better way of finding it than by a tax upon sugar or a tax upon tea, and as we have not been able to see our way to reduce the tax upon sugar, I would ask the Dáil not to think for a moment of reducing the tax on income.
I rise to support the amendment that stands in Deputy Heffernan's name. I do not suppose that that will come as any great surprise or shock to Deputies in the Dáil. The claim I make for a reduction of income tax is that income tax at its present rate is a grave burden on the development of the industry of the country, so grave that I think it largely interferes at the present time with the development of trade. Capital is required for various industries in the country, and capital is provided, as I said before in this House, by the difference between the income of a concern or an individual and the expenditure. I say that to-day it is practically impossible to create capital in that way, on account of this very heavy charge that is on the individual and on the company, more particularly on the company. When we come to compare the present situation in this country with the situation in the sister island we find that a Labour Government is in power there. It is not in power yet here, but it manages to show that it has a kick in it still. The Labour Government there, which is a counterpart of our Labour Party here, has come in, and what has it done? The corporation profits tax is practically an income tax levy on limited companies. The English Labour Government has acknowledged the unfairness of the tax and the unsuitability of the tax by removing it altogether. The Minister for Finance has not approached the subject at all. He says he cannot afford to do it. I say the country cannot afford to bear it as it stands. That is the difference between the Minister for Finance and myself.
The Minister for Finance is, of course, a flinty-hearted individual. We do not look for the bowels of compassion in a Minister of Finance. But if I had sufficient eloquence, I might harrow him on the subject of pressure of income tax on individuals in this country. I do not think I need go very far for companions in adversity, because I think every individual, from the highest to the lowest, is groaning under these taxes. We are, of course, suffering at the present time in connection with inability to balance our Budget. Equally obviously, we are suffering from over-taxation. The Minister for Finance says: "Keep on the taxes." I say: "Cut down the expenses.""Cut your coat according to your cloth," because the country cannot afford, and the private individual cannot afford, the capital that is necessary for the development of industry and the creation of employment if individuals and companies are so burdened that they have no margin between their expenses and profits, or income, as the case may be. Deputy Johnson says: "Put on another sixpence."
I said that, if it is true that all the income tax is passed on to the consumer.
I was not in during the whole of Deputy Johnson's speech, but I think I heard him say that income tax was one of the taxes you could not pass on to the consumer. As a business man, I would be very glad to see how I could pass it on to the consumer. I agree with Deputy Johnson's contention that business men cannot pass it on to the consumer. I have always noticed that our Revenue authorities in this matter are very alert to see you do not pass it on to anybody else. If you do pass it on to anybody else, the person you pass it on to pays twice over. There is no use in looking at this in any other light. I tell the Minister and I tell Deputy Johnson that the present incidence of income tax is really a capital levy, and is operating in that way and retarding the growth of the business of the country. There is the other aspect of the case. You have in Great Britain, a country alongside, which up to recently was intermingled with our own life, a tax of 4/6, and you have in this poor country a tax at the rate of 5/-. In addition, the Limited Companies Corporation tax of one shilling has been abolished in Great Britain. That shows, I think, a want of ingenuity in our financial arrangements. I ask the Minister to recognise the position and see if his ingenuity cannot be directed to giving relief to the people. Remember that this income tax, although it may press more heavily as your income gets bigger, presses very heavily on the people with small incomes. The difference in the rate of income tax in the case of people here who have securities located in Great Britain is causing such an endless amount of worry and trouble that it is really in the nature of a great oppression on the country. In that way, the resolution of Deputy Heffernan ought to get the support I claim for it, and ought, likewise, to get support from the Labour benches. Before I came into the Chamber I was trying to persuade some of the Labour members I saw out in the lobby to come in and vote with us, and I can logically claim that they ought to do so. Deputy Johnson will not, perhaps, agree, but I say that with all your taxes there is no more oppressive tax than this income tax at the rate it is chargeable.
I find myself in agreement, as I so often do, with Deputy Johnson. I am sorry to confess it to the House, but I am an Income Tax payer. I ought to be ashamed of it, and I suppose I am when I look at Deputy Johnson's face. But I find myself in agreement with him when he says that this Income Tax cannot be passed on to the consumer. It cannot be passed on in the same way that the new taxes can be passed on. I understand that while the Minister was making his Budget speech boots were being put up 3s. per pair in a large shop in town. That was passed on quickly enough—even before the boots had paid the tax at all. I do not think Deputy Johnson has pursued the subject as far as he might have done. I am not so much concerned with Deputy Hewat's contention that a high Income Tax will keep out the foreign capitalists. I agree that a high Income Tax will weigh very largely with the man who wants to start a new industry and who wants to decide what country he will start it in. He will naturally go to the country where he will have to part with less of his potential profits than if he came to Ireland. I am concerned with those of us who are Income Tax payers in this country. The net has been thrown very wide and we are all hit directly by this Income Tax, except Government servants and those who enjoy the bonus. I believe the Ministers suffer directly in their salaries. The tax does increase the cost of living in the end. Pending the coming of the Socialist regime that Deputy Johnson dreams of, our business and our trade and the industry of the country must be conducted under the old system of capitalism. Capital grows out of savings. It is the difference between income and expenditure. Where there is shortage of capital, foreign capital will not come and native capital cannot be saved owing to the high Income Tax. Under these circumstances, the employment which Deputy Johnson is so anxious to increase cannot be provided in this country. I will concede to Deputy Johnson that the taxation of a normal country should be largely raised from the surplus of income that men possess. I will concede that a graduated tax on income is the normal way of raising the revenue of the country and not a tax upon necessaries. Deputies who sit upon the farmers' benches opposite after enjoying seven years of prosperity tell us they have no money for anything.
What about the manufacturers and the profits they made during these years and are now enjoying?
It was only yesterday, or the day before, that a well-known accountant told me that of 89 industrial concerns whose books he had audited, 79 were making a loss, and ten only were making a profit. In a country like this, it is absolutely necessary, if normal conditions of employment are to be restored, and the ordinary system of business is to be carried on, that new capital should be introduced from abroad, or, better still, in my opinion, from the savings of the people, and that new industries should be encouraged and started. That can only be done by reducing direct taxation, which is grinding us all down. I was reading the other day a tag, and it wound up with these words: "The wheel that squeaks the loudest is the wheel that gets the grease." There are two interests directly represented in this House. Deputy Johnson represents the largest class, with whom I have the greatest sympathy.
That is grease of another kind.
Deputy Johnson complained, and I sympathise with his complaint, that the poorest people are taxed upon the necessaries of life, but these taxes cannot be reduced until the other taxes grow, and fructify, and the other taxes cannot grow and fructify until some of the restrictions placed upon trade and industry are removed. Income tax and other direct taxes are among the heaviest that are pressing us down. The Labour Government in England, to whom I have more than once referred Deputy Johnson, takes an entirely different view on the question of direct taxation. Mr. Snowden said in his speech, introducing his Budget: "There is another Inland Revenue duty, the Corporation Profit Tax"—and remember the Corporation Profit Tax is income tax on companies, and the 6d. that Deputy Heffernan is asking for is not sufficient, because the Corporation Profit Tax is 1/-, and its non-removal in this country makes the income tax 6/-, as against 4/6 in England, and I am quite in order when I say that in another place Mr. Snowden said—"it was unloved by its parents, it was reviled by its subsequent guardians, it was condemned by every party, not least by the Labour Party; it was sadly crippled by Mr. Baldwin a year ago, and it has quite obviously only been awaiting its final doom." Will Deputy Johnson support an amendment to do away with the Corporation profit tax?
When you reduce the food taxes.
I quite agree, but I am not making a Second Reading speech. I have no intention of going beyond what other speakers have done before me, and I want to confine myself to the subject of income tax. Mr. Snowden goes on, and says, "I do not think its originators ever claimed more for it than this: At the time when trade was very good and taxation was heavy, when more revenue was needed, the tax seemed to be less objectionable than some other taxes that might have been suggested. Circumstances are quite different now. Trade is bad, and the captains of industry, the great leaders of industry, unite in saying that the Corporation Profits Tax is one of the factors hindering the development of trade. I think, therefore, the time has come for the Corporation Profits Tax to announce positively its last appearance," and they took it off.
After reducing sugar and tea.
Yes, I concede that to the Deputy. Now the position here is not simply that we pay 5/- and that they are only paying in England 4/6 income tax. The position is that anybody who comes here to start industry or who is in industry here, has to pay 5/- income tax and the 1/- corporation tax. Neither of the two interests to which I alluded, and which are so ably represented in the House, can claim that they are paying anything approximating to the Corporation Profits Tax on their income. Therefore I think Deputy Heffernan's amendment is a very modest claim and request to the Minister for Finance. I hope he will consider it and that he will consider also a reduction of direct taxation so as to remove some of the restrictions upon trade and employment.
I think that Deputy Johnson is doing his own Party and the people he represents in this country an injustice by refusing to agree with this amendment. There is no doubt about it that the trade of this country is being strangled by reason of the high income tax, and if I were to illustrate that by figures which were asked for to-day in connection with the bacon trade, I would point out that the prices for agricultural produce are higher in the North than they are in the South. You can quite understand that when you remember that the buyers in the South are paying 6/- in the pound in income tax, whereas those in the North are only paying 4/6. I ask the Dáil would it not be for the benefit of labour if we had more employment in this State, and would not the Minister be doing better by taking 6d. off the income tax? If he did so, I believe it would have the effect of providing additional employment, and if such a result were achieved he would be saving himself the vote of £250,000 which is passed to meet the cases of the people unemployed. The merchants of Dublin are seriously handicapped by railway rates as well as by taxes. Therefore, is it any wonder that the trade from the West of Ireland is going to the North? And I ask is not that one of the reasons why this, the capital city of the Saorstát, is a decaying city? I suggest it is the duty of the Minister not to let it decay. Deputy Johnson made some point about the sugar taxes. The reduction sought here would give a reduction in the sugar taxes of ½d. in the pound which would not be passed on to the consumer, and therefore he would be just as badly off as he is at the present moment. Do you follow me?
I do not.
I will explain it to you. The Minister by giving a ½d. in the pound off sugar would lose £400,000 to-day, but the ½d. would not go to the consumer because of the fluctuations on the sugar market. Before the consumer would benefit the reduction should be at least 1½d. in the pound as it is in England. The reduction of 3d. in the lb. on tea, which the Minister gave, has not gone to the relief of the consumer. These small reductions in food taxes are of no use. The way to effect reductions in the cost of living is to give industry a chance of functioning and to provide employment for the people willing to work. These, I say, are sound principles.
When Deputy O'Mara says something about the farmers he generally evacuates. At least I do not see him in the House at the moment. The Deputy spoke of the seven fat years that the farmers had during the big war, but he never spoke of the 27 lean years, and we are in the lean years now. Let anyone turn up Stubbs' Gazette and he will there find the sad reading that the majority of the people who are insolvent to-day are farmers. That is a very sad state of affairs. I appeal to the Minister for Finance, in the best interests of the country, to reduce this tax and to economise as regards the expenses of the Government and of the State to such an extent as will enable him to balance his Budget.
I just want to urge on the Minister for Finance the necessity of doing something for the unfortunate payer of income tax. The present level of income tax is a war level, and I contend that that is an uneconomic level. It is not a level that the ordinary person, I mean of not very great means, can keep on paying year in and year out. The prospect as far as he is concerned is really hopeless. That man is hit both by income tax and rates, and with the present cost of living suffers in three ways. The Minister has shown his readiness to make an experiment, and we are making an experiment in protection. I would ask him to make an experiment in reducing the income tax, and I prophecy that the result of the reduction will not be the substantial decrease that the Jeremiahs who make up these figures for him have anticipated. I think there is a good deal in the contention put forward by previous speakers that incame tax is frightening people out of the country. I have personal knowledge of that fact myself, and I know it prevents people from coming into the country. There is no doubt that for the small man the levy at the present rate is a levy on capital. I am only acquainted with people in my own state of life. These people for many years have been quite unable to save even a little for investment. It is impossible for capital to accumulate. You cannot shovel capital about like you shovel mortar or mud— lift it from one country to another. It accumulates slowly, and is built on credit and confidence and ease of mind. Income tax is a most vexatious tax. It is an inquisitorial tax, and Governments have been upset, not by acts of savage or severe legislation, but rather by petty vexatious acts. The whole income tax community are in a ferment of vexation with the petty interminable forms sent out to them to be filled up, but the fault for that is not with the collectors or inspectors. The forms are drawn, the rates are extremely high and the series of questions you have to answer makes life in the Free State for the income tax payer not as pleasant as it should be. I see the difficulty of the Minister. I know and realise that a reduction in income tax as well as the reduction in the old age pensions by the same Minister, is an act which would be misconstrued, and an act from which capital could be made by the enemies of this Government and of the Free State. I would urge the Minister to hold out some hope to the man of small income. He is hit, as I say on three sides, by income tax and by rates and the general cost of living, and I certainly will support the amendment to see what the opinion of the Dáil is on the question.
I have very little to say except that I agree with the point put forward by Deputy Alton, that the present rate of income tax in this State hits very hard the man or the woman of small income. It is really only the people who have something to spare that the Minister ought to get at. We have nothing at all to say with regard to super taxpayers. These are the people who have the incomes, and they ought to be thankful to have the money to pay the taxes. The people who are hit the hardest are those with incomes of, say, £150. They have to live out of that amount, and with no other prospects in front of them they find it hard enough to make ends meet. I would support the appeal to the Minister that he should give a reduction in the income tax, especially in the case of people with small incomes.
I would just like to say a word in connection with this matter, and I might at the outside express my surprise at the action of the Farmers' party on this particular question. If there is one thing more than another that they impress on us it is that they are people who know their own business and I am, therefore, surprised that they have butted in on this business of income tax which is supposed to be no business of theirs, because the one thing we have learned since we came here is that the farmers have no income.
We cannot keep books; we are not teachers.
Mr. O'CONNELL
If the plea were made on behalf of the school masters, I could see Deputy Gorey objecting to any concession being made. We on these benches are not in love with income tax by any means, and we would be glad to see it reduced to 4/6 or a lower figure, and particularly we would be glad to see the minimum on which income tax is charged considerably increased. The position, however, is this, and it has to be faced, that the money has to be found. Then how is it to be found? We are faced with that difficulty, and we all admit that the money must be found. The only question before us is, should it be found in this way or by increasing the tax on the necessities of life? If there is to be a choice, I have no doubt whatever as to where our choice should be. We should not for a moment agree to the reduction of these direct taxes on income while the taxes on the necessities of life remain, which are taxes proportionately more heavy in the case of the poor man than is this tax in the case of those whose income is chargeable with income tax. Neither Deputy Wilson nor anybody else who spoke in favour of the amendment has given us cogent arguments to show that the reduction of the tax by 6d. would appreciably increase employment. It was Deputy Alton who spoke of the income tax payer being in a ferment of vexation and of the tax being an inquisitorial one. I agree, but his arguments were for the abolition of income tax altogether. The vexation will not be reduced very much by the fact that the tax is reduced by 6d., as I think all the forms and queries which are now in force would still remain even if it were reduced by 6d. It all boils down to a question of where the money can be found. If those who support this amendment are prepared to show us that it can be found in a better way without hitting the people whom we represent, we are prepared to consider whether we should support the amendment. They have, however, failed to do it, and for that reason we are not prepared to support the amendment.
The question of income tax, unfortunately, is one like the poor—always with us. I do not quite follow the reasoning of the last speaker when he seems to seek to show that income tax does not hit the poor or working class elements in the country. The fact that the income tax falls now on those who indeed make quite a small sum and have to pay directly to the State a certain proportion of their earnings, surely, in the first place, must necessarily mean a burden upon enterprise and also a restraint of trade. That being so, undoubtedly it does not encourage employment, and is therefore in no way a benefit, but rather a distinct disadvantage to the toiling masses. What I really rose to point out was that I think it was only a few days ago that the Minister for Finance said that though the reduction of the income tax by such a small amount as is proposed in this case, namely, 6d., would not necessarily bring about an immediate expansion in trade and business in this country—an expansion in, say, the coming year—still he was of opinion that such reductions would bring about such expansion, say, in three or four years hence. That in itself would surely be a great argument in favour of this reduction. It is true it would mean something like an immediate loss to the Exchequer of perhaps half a million pounds. I think that was the figure that was given, but it does not matter very much for the sake of argument whether it is a half or three-quarters of a million. The fact that it would mean that immediate loss must not shut out from our minds the extraordinary psychological effect that such a removal would have upon the whole life of the country, both internal and external. If we were to reduce our income tax tomorrow to the dimensions to which it has been reduced in Great Britain it would be an immediate advertisement to the world that we are in such a state of stability and that our credit is so good that we are able to carry on on the same basis in regard to that form of taxation as our wealthy neighbour. Not only is the tax itself, as all taxes are, irksome in the extreme, but the method of collecting income tax to-day in the Free State is very hard to bear. The fact that a Free State citizen has to pay twice over at first and then has to wait for a considerable time before he gets back, if he has the courage and determination to go on with his effort, what is due to him, is certainly a very disagreeable and troublesome matter for the average person in this country. Over and over again the Minister has been asked, both by question and otherwise, if it is not possible to have—and I see no reason why there should not be—a Clearing House in Dublin, and let the taxpayer pay one tax, which ultimately he is only entitled to pay, and then let the two Governments, the British and the Irish, between them fix the matter, for it is a matter for the Government and not for the individual taxpayer. Perhaps it might be said that this is not in order.
It is going outside the scope of this amendment.
I submit, sir, that you are right, but at the same time one must look at this matter as a whole, and I can say in two words that it is not only the amount of tax that is objected to in this country, but the method of paying it and the method of collecting it. I will say here that prior to the Treaty an arrangement was come to between the Dominions and the then United Kingdom whereby a tax payer there who had property in both countries was entitled to an abatement —had only to pay the one tax. Here in this country to-day if you were to have property in Australia and property here you would have to pay both taxes.
The question is whether the tax should be 5s. or 4s. 6d. in the £.
I am glad to be reminded of that fact, but one of the reasons why the reduction is demanded is because of the exceedingly troublesome and annoying method of collecting the 5s. I think, possibly, if those matters were got over and the 5s. collected in a different manner, there would not be an agitation so great as it is now to have it reduced to 4s. 6d., and certainly the feeling would not be so bitter. At any rate there is no doubt that the State would suffer an immediate and serious loss to its revenue, but income tax was never, and possibly will never be, one of the main sources of revenue in this country. This is essentially a food-exporting country, and our exports have been greater than our imports, and income tax has played a very small part in the past in the total amount of revenue derived. It is a pity, therefore, to overload this tax and to stress it so as almost to make it an uneconomic tax. I believe if the income tax is reduced to the same figure as in Great Britain, it would be, to put it at its lowest value, no discouragement to any people residing there, or elsewhere, to come to Ireland, and that is putting it at its very lowest.
We have had from the Minister a great concession in the shape of a reduction of super-tax. I do not know whether that affects my friend upon my left, but I can assure him that unfortunately it does not affect me, like the great majority of the rest of my fellow-countrymen. Therefore, this concession in regard to super-tax which is supposed to attract people to the country, which is supposed to bring them in here to ask them to die for the country, is only a mockery, is infinitesimal and accounts for next to nothing compared with what even a reduction of 6d. would mean in the tax which is paid by everybody. It may be asked, how will the State be able to make up the difference? There are many ways of obtaining money, and the State is a very good judge of how to get money. I think in this matter the Minister for Finance is not behind any other. We have already introduced and sanctioned a slight experiment by way of protection. There is no reason why similar experiments could not have been made in other spheres, and this experiment may not only, as we hope, increase our revenue, but it may be a means of encouraging and fostering industry in this country. To say that if 6d. were taken off the income tax. we must lose half a million per annum to the Exchequer is not a fair argument. There are other means of raising money besides income tax. There are better means of doing so. There are fairer means, and if the Minister can see his way even now to reduce this tax I think he would be doing something that would be a benefit, not only to the large payers of this tax, but a benefit to the whole community. It would give a feeling of confidence and security both in the country and outside it. It would encourage people to come in from the outside, and it would encourage those who are here to go forward with energy and enterprise, and work for the benefit and prosperity of the country.
The question of reducing income tax was one that was very carefully considered. We are all fully aware of the advantages that would accrue from a reduction in income tax. I know, for instance, that if it were possible to reduce income tax to 2s. 6d., not only the economic effects, but the political effects, would be very considerable and far-reaching. I think the matter is as it was put by Deputy O'Connell. We are allowing nothing at all for the abnormal expenses of the Army; we have a deficit which will be considerably in excess of half a million a year. The actual deficit, when we take into account this abnormal Army expense, will be well over two millions, not allowing at all for compensation. Is it a business proposition for us, with a deficit of well over half a million a year in our ordinary expenditure, to reduce taxation and to make that deficit a million a year? Will it be any real advantage to industry in this country for us to postpone for several years ahead the prospect of balancing our Budget?
I do not think it will. If we have to borrow next year or the year after or the following year—and we still are not closing up the gap—I think the credit of this country will suffer to an extent that will undo, and more than undo, any benefit that might be met by a reduction of 6d. in the £ in income tax. The effect of even a reduction of 6d. would be something. It would not, perhaps, bring many people back to the country or prevent many people going out—because the reduction in itself does not represent a very big thing to the average taxpayer. I know it would be healthy and it would be good if we could do it, but certainly it would be very harmful to the country to make this remission in taxation when we are in the state that we are in, unless we put on other taxation to counter-balance it.
I do not conceive it would be just or expedient, that it would lead to stability or public peace or security, for us to take 6d. off the income tax and put another halfpenny on to the sugar tax, or 3d. or so on to the tea tax. I think the effect of doing such a thing would not be beneficial, but would be extremely harmful and dangerous. Now, it does not press so hard on people with small incomes to pay income tax, as Deputy Gorey imagines. Take the case of a man with £400 of earned income. If he is a man with three children the amount he would pay in the year would be £4 7s. 6d. at the present rate of income tax. I do not think that that would be so very harsh in that particular case. There is fairly substantial relief for persons on the lower limits in regard to income tax.
With regard to the small reduction that was made in the super tax maximum, I do not pretend that that was any considerable concession. I put it forward as a change that would give us increased revenue. We have a very small number of people in this country who would be affected by it—not 100 people in all. The number of people with large incomes in the Saorstát is very small indeed. The small loss that we might suffer by that reduction in the maximum would be offset altogether if even a half-dozen or a dozen people who would be affected would remain in this country instead of going away, or would come into this country. I know actually of two cases of super-tax people who would be affected and who intended leaving the country, and they altered their minds as a result of that small change. I believe that will have the effect—coupled with the change in the death duties—of adding substantially to the yield in taxation. I do not put it forward as a reduction or a concession to the taxpayer, although it will work out in that way to one or two individuals.
I think most of the Deputies who spoke in favour of this amendment must not have anticipated that it would pass. They simply wished to emphasise the desirability of reducing income tax if it could be reduced; but I would be very reluctant to think that there would be any large volume of opinion in the Dáil in favour of reducing taxation at a time when we must incur debt to meet, not military charges and not compensation charges, but the ordinary everyday charges of running the State. Before income tax can be reduced, expenditure must be reduced. If there was a balance, as they had a balance in England, I would be very glad to dispose of that balance, in part at any rate, by a reduction of the income tax, and I would conceive that I was opening, or helping to open up, avenues of development by that reduction. But I do say in the condition which we are at the present moment, it would not be wise or safe to do it.
Has the debate concluded?
It has, unless you desire to ask a question.
As a matter of procedure, I think we ought to be made aware whether the debate is being concluded or not. With all due respect to the Chair, it does seem rather arbitrary that a Deputy's privilege as a representative should be curtailed through the mere accident of his being unaware that the debate was closing.
Before the Minister rose to speak, I allowed a considerable time to elapse, and when I called on the Minister I stated he was to conclude the debate.
I was not here, and I was not aware of that.
Mr. O'CONNELL
When I rose the Minister had been called upon to conclude the debate, but I was permitted to speak before the Minister.
Obviously, sir, I am wrong.
Amendment put and negatived.
Question—"That the Dáil agree with the Committee in Resolution 14"—put and agreed to.
I regret that it will be necessary for me to go now, and I propose to take up the remaining resolutions on Tuesday next.