On the section, it is sometimes salutary to browse among the Dáil reports and consider the thoughts and declarations of the great men who preceded us on these benches. This section is intended to give effect to the Resolution which was adopted by the House, against the opposition of this Party, by which the standard rate of income-tax which, until the 6th day of April of this year, stood at 6/6 in the £, is to be increased to 7/-. Last year, the Government then in office, a Government which has been characterised as being disregardful of the interests of the general taxpayer, proposed that the income-tax for that year should be at the rate of 6/6 in the £. That motion was duly adopted by the Dáil and was embodied in the Finance Bill for the year. That became the law and was the law until the Minister and the House faulted it.
It will be interesting to recall what the present Minister for Education, then the Leader of the Fine Gael Opposition, said about the proposal to maintain income-tax at the rate of 6/6 in the £. I do not propose to weary the House by reading the whole of his pronouncement on that proposal, but I think I might repeat some passages from it. They sound very ironical and somewhat cynical in the light of what has transpired since then. Deputy Mulcahy, speaking on Resolution No. 1 in this House on the 7th May, 1947—the reference is Dáil Debates, Volume 105, column 2262— said:—
"I wondered for a moment—just for a moment—at the applause that the Minister's statement received from the Government Benches, because the Minister proposes to put his hand to the extent of £5,374,000 deeper into the taxpayers' pockets during the coming year than he did last year..
"At the Social and Statistical Society the other night a Dublin citizen read a paper on general Government expenditure and there are some interesting figures to be taken out of it at this moment. He disclosed that the expenditure of the Department of Agriculture in 1929-30 was £430,000; in 1939-40 it was £865,000, and in 1945-46 it was £985,000."
This year, of course, it is even more than that, but I did not notice in what the Minister said any proposal to reduce the provision which was being made for the Department of Agriculture any more than I noticed it in what the Minister for Local Government said in introducing the Estimate for his Department. I did not notice any proposal to make any reduction in the £1,139,950 which is being asked for the Department of Local Government. If the proposal to fix the standard rate of income-tax at 6/6 in the £ was opposed on the grounds of extravagance last year, what are we to say to the proposal to increase the 6/6 to 7/- in this year without giving, so far as we can see, the public any better value for it?
Now, I know that if our proposal to stabilise the cost of living by subsidising the essential foodstuffs of the people had been adopted, it would have been necessary for us to increase in this year the standard rate of tax to 7/- in the £ just as it would have been necessary for us to maintain the additional duties on beer, spirits, tobacco and entertainments imposed under the Supplementary Budget. But these additional taxes were being imposed for a definite purpose, let me repeat it again, to subsidise the essential foodstuffs of the people, and in order to stabilise the cost of living and enable the people to provide the necessaries of life for themselves and their families. That policy has been abandoned. We now find a Government in office which, so far from making provision to maintain the subsidies, is taking steps to reduce them. We find that the Minister has already proposed to discontinue the subsidy for margarine and oatmeal and farmer's butter, I think, and is now, by permitting the price of bread to be raised, going to reduce the subsidy in respect of bread. The original proposals of the Government, therefore, in relation to the cost of living having been abandoned, there is no justification in my view for maintaining this tax which presses so heavily on a very large section of the community.
If the policy of maintaining the cost of living steady has gone by the board, and it is undeniable that it has, then there is no justification for increasing the standard rate of tax in this year. This proposal is not only not capable of being justified, but it is highly inequitable and anti-social. I suppose that the number of people in the country who will be called upon to make returns in respect of income-tax would be between 130,000 and 140,000, and of those a comparatively small number, I think about 3,800 or 4,000, are people who are assessable to surtax, that is people whose incomes range above £1,500 a year. Their aggregate income might be taken to be between, I think, £11,000,000 and £12,000,000. Of the others—the number may be 135,000 or 125,000 and in a matter of this sort it is difficult to be accurate within 5,000 or 10,000—but if we take the remainder to be 125,000 income-tax payers, they have actually an income of about £60,000,000 between them, so we have 125,000 people whose aggregate income, before it is subject to any deductions or allowances in respect of earned income, personal allowances, or children's allowances, amounts to about £60,000,000, or an average of roughly £470 or £480 per income-tax payer.
These people in general are married people, with family responsibilities. The mode of life of the vast majority of them must be very thrifty and frugal. They are people who have to maintain a certain position, who have to try to see that they and their children are well clad and who have to make certain provision for the education of their children. They are expected to do that because perhaps of their employment or the occupation they follow. They are subject therefore to greater necessary living expenses in some respects than a great many people who do not come within the net of the Revenue Commissioners in respect of income-tax. These people, if they have any regard for their family responsibilities, must naturally live within a very narrow and restricted budget. Many of them have to live within a budget so narrow and so restricted that they cannot afford either to drink or to smoke. Many of them, the heads of families and fathers of families, are in the position that they must stint themselves in order to provide for their children even the same sort of meagre opportunity in life as they themselves got. Even many of those of them who are not married have to live thriftily also, and, because they want to contribute adequately to the family income and perhaps to maintain aged parents and other dependents, cannot frequent the public-house and cannot smoke extensively or expensively, as do many of the people who do not come within the income class at all.
Yet, what do we find? We find this thrifty element in the community are to be victimised, and victimised for one reason only. The reason it is necessary to increase the standard rate of income-tax this year is that the Minister incontinently reduced other taxes —taxes upon entertainment, upon tobacco and upon beer. That is the position which has been created. Because the Party opposite entered into commitments with the licensed trade in the City of Dublin in regard to the beer and spirit duties, the thrifty income-tax payer, the man with an average of about £480 a year, who does not smoke and does not drink is to pay an additional 6d. in the £ this year. I say that is unjust and anti-social. This income-tax class, this thrifty middle-class, which ought to be fostered and encouraged, is being penalised in order to make drink cheaper for the tippler and the toper. I cannot think that that can be justified, but that is the reason why it is necessary for us in this year to increase the standard rate of tax from 6/6 to 7/.
Let me repeat—because I do not want to be misrepresented in this matter—if our policy of subsidising essential foodstuffs for the people had been persisted in, if our policy of trying to develop the natural resources of the country had not been jettisoned, if the things we thought it was essential in the national interest to do were being done, if the general scheme of taxation which we had formulated were being retained, we should have no objection to increasing the rate of tax, because we think that the community as a whole would have benefited from the policy we were pursuing; but when that policy has been abandoned, when the cost of living is to be permitted to rise, when civil aviation is being crippled, when mineral exploration is being abandoned and when the rate of interest to local authorities is being increased, then we can see no justification for increasing this tax. It is increased in order, as I have said, to make drink cheaper for those who are able to afford or who think they can afford it. It is being increased in order to reduce the duty on tobacco and, therefore, the nominal price of cigarettes in the Twenty-Six Counties.
I put it in another way—it is being increased in order to subsidise the smuggling of cigarettes and tobacco from the Twenty-Six Counties into the Six Counties, because, if the tobacco duty had been retained at what was a reasonable rate, having regard to conditions elsewhere, it would not be necessary to increase the standard rate of income-tax. It would have been quite possible for the State to carry on its services in the present restricted and limited way which the Minister for Finance proposes without increasing the rate of tax. Not only would it have been possible to do that, but there would have been a very large sum left over to continue the food subsidies.
The Minister has abandoned food subsidies. He has secured the abandonment of every constructive development we had in contemplation. He has made no additional provision for housing or any other public service. He has even indulged in petty economies which should make him blush for the meanness of them. Yet, at the same time, he asks that the frugal lower-salaried middle class who constitute the bulk of the income-tax payers and who no doubt vote Labour and Fine Gael just as they vote Fianna Fáil, shall be penalised in order that he may fulfil the undertaking which he gave to the licensed trade in Dublin during the period of the last general election. For that reason, we intend to oppose this section.