The Deputy had not reached the use of reason in 1934, and I doubt whether he has reached it yet. I was asking, what taxes are you going to levy in order to raise money to finance the local services if you derate buildings, and if you decide that the money must be provided out of the Central Fund? Everybody knows—I think it is generally admitted; it is certainly admitted in Great Britain by no less than the Labour Chancellor—that direct taxation has reached its limits, and that it has now become a deterrent to enterprise and is tending to yield a dwindling return. For that reason the British Chancellor has indicated that he proposes to adopt new expedients for raising revenue, and that he is satisfied that income-tax, super-tax and the other direct taxes on incomes have now reached such levels that they are defeating themselves because they are curbing and stultifying enterprise. He has introduced a new tax, a purchase tax, which is the most oppressive of all taxes and which falls with the utmost severity on the poorest classes of the community.
Our position in this country is better than it is in Great Britain, undoubtedly from the point of view of taxation, but here, too, everybody is beginning to realise that the level of income-tax and of the other taxes upon profits is acting as a brake upon industry and as a brake upon enterprise. Accordingly, if we have to provide these huge sums which are now necessary to finance the local services we shall have to provide them out of some form of indirect taxation, and that indirect taxation must in its very nature, since it must be a tax upon commodities or a tax upon services which are in general use—or it may be a tax upon business transactions — ultimately fall most heavily upon the poorer sections of the community.
That is one of the alternatives which confront those who have made themselves responsible for this motion. If they are going to proceed to develop their principles to their logical extreme they must derate all buildings, and they must find an alternative method of raising revenue. One of these alternatives is to raise that revenue out of indirect taxation by taxing the food of the poor. This is what I am putting to the Clann na Talmhan Party: do they wish to substitute taxes upon the food of the poor for taxes upon the possessions of the property-owning class? That is one of the alternatives that lies before them. Are they going to take it? The Leader of the Clann na Talmhan Party will perhaps be replying to this debate. I say to him that his motion is, in essence, a motion to relieve the property owner of what is a just imposition upon him. I am asking him, does he propose to relieve that property owner by putting an additional charge on the Central Exchequer, and does he propose that that charge should be met by taxing the food of the poor in order to relieve the aforesaid property owner?
Another alternative, and it is an alternative which has been chosen elsewhere, as I shall show, is the alternative which has often been argued in this House over the period from 1933 to 1938. During that period there were several motions put down by members of the Fine Gael Party advocating this alternative in one form or another. The alternative is this: if you are going to derate buildings, and if you are not going to provide the revenue which is necessary to carry on local services out of the Central Fund by indirect taxation, are you going to put a tax upon land? That is another way. Land is a fixed property; land is undiminishable and, therefore, the value of land is easily determined. It is a very suitable tax, if one likes to impose it, for the purpose of raising local revenue. It does not fall immediately upon the poor. I am not prepared to say that it might not ultimately fall upon them in the form of increased prices for their food, but it is an alternative form of raising local revenue which has been adopted in other countries, notably in Deputy Cogan's earthly paradise, Denmark.
It is a great pity that Deputy Cogan was taken at such short notice in moving this motion; it is a great pity he was not able to dilate at length upon the joys of the Danish farmer. I am not asking the House to take anything I say upon my authority. I shall give some quotations from a very recent article dealing with conditions in Denmark, that blessed State to which Deputy Cogan and, apparently, his colleagues in Clann na Talmhan, aspire. The article is an extract from Land and Liberty, for August and September of 1946. It is headed “Denmark Revisited”. I am giving only some quotations from that article, the significant ones. The article states that the national land value tax—mark that, the national, the State, land tax—is now at the rate of 6d. per mille, corresponding to 1½d. per £ capital value or, say, 2/9 in the £ of annual value. That is imposed on all land in town and country alike.
Is that what Deputy Cogan proposes as the alternative? It would be one way of finding the money to derate buildings; it would be one way of finding the money for the national Exchequer if the burden of the local services were to be cast back on the national Exchequer. Are Deputy Cogan and Deputy Blowick, in this motion, leading up to the blessed position which obtains in Denmark of having a national land value tax at the rate of 2/9 in the £ of annual value? The writer of "Denmark Revisited" goes on to say that also over the whole country and on all land the local taxation of land values applies. In Denmark, this far-off field which so appeals to Deputy Cogan, not only have they a national land tax, a State land tax, but they have in addition, a local land tax. The writer goes on to say that the local taxation of land values applies to all the land, bringing in, on the average, 40 per cent. of local revenues in counties and rural parishes, but in towns considerably less.
We see this, therefore, in this motion, one of the concealed objectives—because I take it that the Deputy is quite logical in what he proposes to do, and fixed in his purpose—of Clann na Talmhan is to institute not only a local but a national land tax. In Denmark, where the urban population is relatively much greater to the agricultural population than it is in this country and where, accordingly, the value of urban property is relatively greater in proportion to the value of the agricultural land than it is in this country, the position is such that the local land tax brings in more money in the rural than it does in the urban areas.
That is not all of it; that is not the only boon and blessing that the farmer in Denmark enjoys. In addition to the national tax and the local taxes on land values, there is a special increment tax which takes some part of the increase of the value of any land. The datum line is the 1932 valuation, and the increase is determined on each subsequent periodic valuation. It is not charged once for all but is an annual tax levied on that part of the land value which is shown to have increased in the interval. We must ask ourselves how happy the Irish farmer would feel if he were in the position of the Danish farmer, the Danish farmer with his land studded with farm buildings, if every year or two his land were re-valued and if any increase which had taken place in the valuation of that land in the meantime were subject to a tax. The unfortunate farmer in Denmark gets no compensation if, over the period between one valuation and another, the valuation of his farm has gone down; he does not get any refund but is merely taxed as long as the value of the farm is going up.
I wonder what the position of Clann na Talmhan would be if we were to introduce the Danish tax-system into this country. I suppose if we were walking down Grafton Street we should see there in one of the shop windows spectacles such as the populace of Copenhagen witnessed a week or so ago. I have here in my hand a photograph. I do not know whether we can include this photograph in the records. It would be a very beneficial thing if we could do so, because when Deputy Cogan began to sigh for the Danish heaven he could go to the appropriate volume of the Official Reports and he could look at this pathetic picture.
The picture shows a little pig enclosed within a child's play-pen, complete with ball-frame, and I read that behind it in the shop window there is a placard which declares: "When I grow up I will be sent to England for the price of 20 kroner and instead you will receive roller skates, transfer pictures and other utility goods for which the English demand outrageous prices. How long are we going to put up with it?"