Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 14 Jun 1966

Vol. 223 No. 3

Committee on Finance. - Finance Bill, 1966: Committee Stage.

Before we proceed with the Committee Stage, I should like to say that, as a result of the discussion we had about the procedure today, there emerges a suggestion that we take Part I in Committee and then, if we finish that, before 10.30 p.m., we might adjourn and go into the general debate on Resolution No. 3 tomorrow. Deputy Sweetman has told me he does not believe that Part I will be finished tonight.

I still think that.

He is not prepared to agree, in the event of Part I finishing tonight, to go on to the Committee Stage of the other Parts of the Bill than the Part which will have to be amended by reason of the introduction of Resolutions Nos. 1 and 2.

Where does Resolution No. 3 come in?

That will be a separate Bill.

A separate Bill, not merely a separate part?

That is right.

We shall take Part III of the Bill this evening?

Yes, Part III of the Bill but not Resolution No. 3.

It is only Part III that is affected by the Minister's proposals today? There is no other change?

That is so. We can deal with them tonight if we have time.


Question proposed: "That section 1 stand part of the Bill".

Section 1 is the section which imposes the charge to income tax and surtax for the coming year, including, in relation to income tax, the charge on everybody's salary under PAYE. It is relevant that in relation to the charge of these taxes on income we should look at the pattern and the picture which we have had over the past years, coming up to this year.

For the financial year ending on 31st March, 1961, the total taxes on income were £38,300,000. In the current year, as a result of this section that figure will have risen to £92,500,000 or, as near as makes no matter, three times what it was. Even if one takes it in much more recent times, one finds that in 1964-65 the total taxes on income were £71,400,000 and this year they will be £92,500,000. Let us look at what the increase is from a percentage point of view. Between 1961 and 1966-67, that is to say, a period of six years, the amount collected in income tax, surtax and corporation profits tax has gone up by no less than 133 per cent. The total taxes on income in that period have gone up by no less than 142 per cent. The increase in the past three years, 1963-64 to 1966-67, for income tax, surtax and corporation profits tax, is one of 52 per cent. The total taxes on income have gone up by more or less the same amount or, to be exact, by 51 per cent.

In three years the amount taken out of the pockets of the people by direct taxation has increased by over one-half. What greater disincentive can we have when we have one-half more taken out of the people's pockets by taxation? In so far as this year is concerned, the effect will be that the people about whom Deputy Corish was speaking earlier are going to pay 14/6d in every £1 in taxation to the Minister for Finance and if they are earning that money out of a company, the company has already paid 7½ per cent on the first £2,500 of profits and 23 per cent on the remainder. The individual taxpayer-salary earner in every walk of life who is liable to pay tax under PAYE is now going to pay in this year 5/3d out of every £1 compared with 4/9d last year.

Is it any wonder when we see these direct taxes going up year by year that we find an inclination not to do the same amount of work and that we find people saying that it is not worth while undertaking any additional work, and therefore undertaking any additional responsibility, because the Minister for Finance is going to take it all from them in any event? The Budget of last March is going to take out of the pockets of the people, in taxes on income, £13 million more than last year. Last year the total taxes on income were £79,800,000 and this year the figure will be £92,500,000. All this is in spite of the fact that a very short time ago the Fianna Fáil Government published a White Paper stating that they were against an increase in direct taxation, trying to give the impression that they accepted the view that taxes of this magnitude and of this sort meant that there would be a disincentive to work.

The increases I have mentioned are staggering figures and the tragedy is that the extra money being obtained —as will be dealt with more fully on the General Resolution—is not being taken for the things which really matter and which, unfortunately, are still awaiting a solution. For that reason, because of the appalling increase which is typified and summarised and put into effect by section 1 of the Bill, we propose to vote against it and not merely to protest but to endeavour to get the Minister for Finance to put some brake on the manner in which he is digging his hands into the pockets of the people.

This section not only imposes the charge to income tax of which Deputy Sweetman has been speaking but re-enacts for a further year the several statutory and other provisions which were in force on 6th April last. I do not think I spoke on the Committee Stage of the Finance Bill last year, but in previous years, during the regime of the Minister's predecessor, it had been my custom on this section, so to speak, to call for three cheers for a great English gentleman, Sir William Pitt. He has been dead for 150 years, resting in Westminster Abbey. We are here re-enacting for the Republic of Ireland a vast volume of legislation, the principles of which were laid down by him for a country which is now a foreign country to us, for a time and in circumstances which had no similarity whatsoever with the present time or circumstances.

These laws of Sir William Pitt were first brought to this country in 1853. That means that we are now re-enacting them for the 113th year and the fact that the Minister some weeks ago brought in an income tax consolidation measure is not going to make one whit of a difference because the bulk of the provisions in the Consolidation Bill are taken from the British Act of 1918, and the bulk of them go back to the original Act of 1853. The principles go back even earlier, to Sir William Pitt's time. We are now going through the absurd farce of translating that Income Tax Consolidation Bill into the Irish language, a process which will take perhaps three or four years and will cost us tens of thousands of pounds. That is not an exaggeration.

We are deluding ourselves into the belief that we have a tax code which suits us. Nothing could be further from the truth. I felt that with the Minister's predecessor one was beating one's head against a stone wall on this question of tax reform, but I would hope that the present Minister would have a more open mind on the subject. I did urge him, I think, last year briefly to study the five reports of the Income Taxation Commission which was established by Deputy Sweetman, when he was Minister for Finance, and which had the misfortune to report to the former Minister, now Senator Dr. Ryan. The bulk of the recommendations of the Income Taxation Commission has not been implemented. They make five lengthy reports. The members sat for years and they gave tremendous national service completely without remuneration. The labours of these public servants have been very largely ignored by the Government. In two White Papers the former Minister, now Senator Dr. Ryan, rejected most of their recommendations. There is a tremendous need for a radical approach to tax reform and I would hope that the implementation of the proposed consolidation measure might have this effect, as indeed has happened I understand, with other cumbersome and unwieldy statutes and it may well be the first step in the reform process.

But let us face up to the fact that the bulk of this law is completely unsuited to our conditions and was never designed for them. Deputy Sweetman adverted to the fact that, as compared with three years ago, there will be collected in the coming year 50 per cent more direct taxation. As compared with ten to 12 years ago it will be found that the number of wage and salary-earners, persons taxed under Schedule E of the tax code, has multiplied tremendously. There are something like 200,000 wage-earners taxed under Schedule E. If there is one part of the taxation code which is more unsuited to Irish conditions, which creates resentment and social injustice, than that part of our law which relates to Schedule E, I have yet to hear of it.

The rules applicable to Schedule E have been condemned time out of number by eminent judicial authorities. We shall have a further opportunity of discussing that in relation to a later amendment. I do want to say that the majority of wage and salary-earners in this country, those who are taxed under the PAYE system, labour under a sense of acute grievance because they are paying tax on 20/-in the £ of their income under a set of restricted rules. It is time, because of the situation that has arisen whereby we are depending for direct tax revenue on the wage and salary-earners to an inequitable extent, that a fresh look should be taken at the whole concept of taxation as applied to these people, who, incidentally, are probably the most sorely affected section of the community as far as indirect taxes are concerned also.

It is time we recognised the inherent difference in concept between income which arises from personal efforts and is remunerated by way of salary or wage and income which springs from business profits which has built into it, as it were, an element of return for capital invested. The salary or wage-earner has a precarious form of livelihood which is dependent on his personal efforts. If his personal efforts cease his income ceases. Though most business people are hard-working it is nonetheless true to say that if the publican on the street corner falls ill his income in one form or another will continue to maintain itself. He will not be left stranded as the wage or salary-earner will.

There is that fundamental basic difference in concept between these two forms of income, and a code of rules applicable to one is not necessarily the right code of rules to apply in equity to the other section of the community. Notwithstanding that, it is anomalous that the code of rules applying to wage and salary-earners is often more vicious and restrictive than that applying to any other sector of the community.

In this matter we must get away from the British precedent. There is not in Britain the unjust situation, which exists in this country, of the economy being so dependent on wage and salary-earners for direct tax revenue. The social injustice in this country is greater and, therefore, it behoves us to branch out on our own in our thinking about this fundamental and inherent difference in concept between the two types of income.

The disincentive effect of PAYE has a bearing on this. I am sorry Deputy Corish is not present. He was here a few moments ago. What I am saying is relevant to a few remarks of his which I saw quoted in a newspaper last week. At a trade union function he spoke about the rate of taxation evasion. If there is one section of the community which does not evade taxes it is the wage and salary-earners. On that account, among other reasons, they have this sense of grievance which I spoke about a moment ago. I am asking that this difference be recognised in a broad way and compensated for, in effect, by tax differentiation as between these two sections of our community. There is built into our tax system the means of effecting that differentiation, namely, earned income relief at one-quarter of the total taxable income which is effectively exempted from tax up to a maximum income of £2,000.

I suppose the conclusion one can come to from what I have been saying is that the rate of earned income relief applying to salary and wage-earners should be an increased rate as compared with the rate of earned income relief applied to other sections of the community, simply by reason of the fact that other sections of the community have a return for capital built into their income. The wage-earner and the salary-earner are not in that position. I hope I have not laboured that point unnecessarily.

In the field of tax reform, there are many other bristling anomalies and injustices. Have we ever taken a long hard look at the personal allowances for tax purposes? Have we ever decided what these allowances are intended to cover? On what principle are they based? One thing is very clear, and it reinforces what I have been saying about this question of social justice. The usual starting point at which we try to measure inflation is 1938 and 1939. We speak of the pre-war £. It is provable that the £ today is worth approximately 6/8d in terms of the 1939 £.

In 1938 the personal allowance for a married man was £225. If we are to maintain the relative position of the taxpayers with each other and with society as a whole, the personal allowance on that basis should be £675 today. In fact, it is £380. That brings into context this question of social justice, because these anomalies and injustices are far greater by reason of the fact that we are now relying on the small man for direct tax revenue to a fantastic extent, to an extent which was never visualised by those who drafted our tax laws. Indeed, it is true to say that in Sir William Pitt's time, 150 years ago, the income tax drafted by him related very largely to land and fixed capital.

To get back to the Commission's report which I would urge the Minister to have a fresh look at, there are many other grotesque anomalies. There is the Schedule A tax on notional income— the householder's tax—which the Commission strongly recommend should be mitigated almost entirely on valuations up to £30. Nothing has been done about that. It is a maxim of the law that equity is a stranger to income tax. That has been too rapidly accepted by successive Ministers for Finance in the past. We must cast that concept overboard if we are to create in this country a just society. It is a concept which the Minister's predecessor was far too readily prepared to live with.

This grotesque tax on notional income—the householder's tax, as I call it—has been done away with by a Tory Government in Britain but that arch-Tory, the Minister's predecessor, Senator Dr. Ryan, not only refused to do anything about it but on doctrinaire grounds, tried to defend his refusal. I could readily appreciate a Minister for Finance who would say: "We cannot afford to do away with it. I need the money. I must find it", but a Minister who on doctrinaire, antiquated theories endeavours to justify what is unjustifiable is making a damned fool of himself.

Unfortunately, these anomalies of old British law—unsuited to us—were added last year in our Finance Act, 1965 and because we are re-enacting them here again, and because this would hardly be relevant at any other stage of the discussion, I want to say a few words now about Part VII of last year's Finance Act, the notorious provision which brought in a tax on the sale of one's property. I only wish I had succeeded before I left the office this afternoon in finding the opinion of a learned counsel which I saw some weeks ago in relation to a point arising out of Part VII. I should like to have quoted the concluding paragraph of that opinion for the Minister, but I could not find it. The gist of it was that this learned counsel, this leading counsel, would take no responsibility for the advice which he had given because of the obscurity of the provision, and because of his extreme difficulty in deciphering the intention of Part VII of last year's Finance Act. It has caused consternation.

Hear, hear. The Minister says no one has any problem with it.

It is quite simple. The intention is quite clear.

The intention is quite clear? Numerous counsel do not agree.

The only person I know who found the intention quite clear is the Minister for Health.

The latest example I heard of concern about this matter —and it is no harm to mention it because it bristles with injustices—is that of the Representative Body of the Church of Ireland who, as we all know, are selling up rectories and parsonages in isolated parts of the country. These rectories were first built about a century ago and this Body are now apprehensive that on the sale of these rectories they will be assessed for tax on the profit.

I doubt if that particular point arises.

It arises because Part VII of last year's Finance Act is being re-enacted by section 1 of this year's Bill. This is one of several statutory and other provisions which were in force on 5th April and they are now being re-enacted.

It is technically in order, Sir. There is amendment No. 2.

I do not wish to labour this point.

I hope Deputy Byrne will. It is outrageous.

We are endeavouring to encourage business people to modernise and re-equip. You cannot modernise and re-equip and move your factory to a new premises without disposing of your old factory. If you dispose of your old factory, are you going to be assessed for tax on the gain at the sale? Surely, if there is a gain, that is part of the financing process of the modernisation and development in which you are engaging?

The Institute of Chartered Accountants had something to say about that very example in a submission which they made to the Minister some months ago. If I may quote from their submission to the Minister which was circulated to members of the Institute, it was to this effect:

In general, the reason why trading concerns move to new premises is to facilitate the expansion and re-equipment of the business in line with the Government policy on the development of industry. The result of the imposition of tax on the incidental surplus arising on the disposal of the old premises will be to reduce substantially the funds available for the purchase of new premises and to finance the expansion of the business.

This is a very simple statement of the fact. I know the Minister has set up a special section of the Revenue Commissioners which is dealing with property disposals. I am also aware that a few weeks ago the Minister took the unusual step of issuing a press statement of his intentions in respect of Part VII of the Finance Act, 1965. I invite him here and now to elaborate on these intentions to Dáil Éireann. Is it intended next year, if the Minister is still in office——

Which he will not be.

Will the Deputy bet on that?

——to amend Part VII with retrospective and reactive effect. Those are matters which are causing great concern to business people and others. It is proper that we should be advised of the Minister's current thinking on the matter.

I will tell the Deputy.

I did not realise that Deputy Byrne was going to go on to Part VII of the Finance Act, 1965, which he undoubtedly was entitled to do under the Rules of Order. I welcome the fact that he did so because he has done so in precisely the same way that my amendment No. 2 would do it. The fact, of course, is that nothing has denigrated more the personal reputation of Deputy Lynch as Minister for Finance than what he did in relation to Part VII of last year's Finance Act.

He stood in this House about three months ago and said he had got no complaints whatsoever in relation to the working of that part of the Act. Yet, within a matter of days, we had the Revenue Commissioners announcing that they were setting up a special section in Upper O'Connell Street to deal with people who had queries on the Act. It showed either that the Minister for Finance did not know what was happening in his Department or that he was, deliberately, not telling the Dáil the whole facts. I prefer to believe the first of him rather than the second. I do not think he would deliberately tell us a lie but the fact is, as everybody knows, that there is not a single person in the Bar, a single accountant in outside practice, other than the ex-accountant, the Minister for Agriculture, who is able to tell anybody what Part VII of the Finance Act, 1965, means.

The Minister for Agriculture says it is simple and everybody can understand it. If he goes to his profession or if Deputy Vivion de Valera goes down again to the Bar Library both of them know the advice they will get as to what Part VII of the Finance Act means as to the circumstances in which liability under it will operate.

I will go back and advise the Deputy.

I would suggest to the Deputy that there will be a certain amount to be gained if he studies Part VII of the Finance Act, 1965, and as an expert on Part VII operating in future down in the Four Courts he will be well rewarded for it. I do not know what his remuneration in his present business is, but whatever it is if he was able to tell people what Part VII meant he would get a great deal more because none of his colleagues in the Bar is able to do so.

The fact, of course, is, as Deputy Byrne said a minute ago, that people in all walks of life are being caught by that Part. The manufacturer who wants to move to a new factory inevitably has, during the last six years in which he has been in his factory, done some little reconstruction work. The effect of doing that reconstruction work brings him within the purview of Part VII of the Finance Act, 1965. When he goes to sell his factory he has to pay tax on the difference between what he bought the factory for and what he gets for it less what might have been spent on it. The same applies in the case of the single individual who buys a house and then, having bought the house, adds a bathroom and then perhaps he is unfortunate enough to die. His widow finds she cannot keep that house and she has to sell it. She will be taxed on any increase in price there may be because the bathroom has been added and because there has been reconstruction work of that sort within six years.

We all know what Part VII of the Finance Act of last year was designed to catch. Nobody on this side of the House no more than anybody on the other side objects to that. It was designed to catch builders who were developing and who were syphoning off the profits of their building in a way which was legal but which in effect meant they were free from tax. That was because the builders concerned were prepared to tell a lie that they had not the intention when they bought the building site of developing it. It was only if the Revenue Commissioners could prove they had the intention of developing it that the Finance Act, 1965, section 6, caught them.

No reasonable person could disagree with the desire of the Minister for Finance to close the gap. It is quite outrageous to close the gap in such a way that those outside the ordinary building trade, those outside the ordinary development trade, those outside the ordinary speculators in land today and many innocent people are caught. It is quite outrageous to close it in such a way that not merely were those people caught but they were caught for what, in effect, is a capital gains tax on the diminishing value of money. That is something which we will be able to discuss more clearly when we get to the point in amendment No. 2. The sections of Part VII of the Act of 1965 which have been referred to by Deputy Byrne have proved unworkable in operation. That Part of the Act may have proved unworkable to the extent that it has meant there is such a collection of queries under it that it has proved such a clog on building, already sufficiently depressed by the credit squeeze, that no profits have escaped.

It was never intended, however, to catch a person who wished to do a reconstruction job and who, because of that reconstruction, was brought within the terms of the Act, in the same way as the person who is buying land for development and building 100 or 200 houses on it. Everybody was quite prepared to meet the Minister for Finance in regard to that type of avoidance by the builder, the developer, the speculator, but the Minister gave an assurance that the ordinary individual would not be hit. In fact, it means, as the Act was drawn, that ordinary cases are liable and the Revenue Commissioners, in pursuance of their job, must pursue all those who are liable.

Many of us did not raise this earlier because there was a rumour that Part VII of the Act would be severely amended this year. Having believed that—I frankly did believe it—we thought it was better to let the official amendments come to light. None has been introduced. The Minister for Finance has dug his head further into the sand like an ostrich in relation to that Part of the Bill and no amendment has been produced. For that reason, Deputy Byrne was entirely correct in the strictures he passed not merely on those sections of the Act but on the Minister for having introduced them and retained them.

There are a couple of other things in relation to the general trend of taxation that it might be desirable to stress again. If one goes back over the past five years one can see that taxation on income in that period has doubled— that the amount taken out of the pockets of the people by the Minister for Finance during the past five years is now twice as much as it was.

Have not incomes gone up also?

I shall come to percentages in a minute if the Deputy would have just that little bit of patience. Total taxation has gone up from £45.5 million to £92.5 million in the current year. The burden of taxation, the proportion of the output absorbed by taxation—the point made by Deputy de Valera——

That is not so.

I shall give the Deputy any percentage he likes. I have all the percentages. The proportion of output that is absorbed by taxation of the community has increased by more than one-fifth since the beginning of the decade. I made a shot at calculation when the debate began and I have calculated that the percentage of direct taxation of net output this year compared with last year has increased by about one-sixth. I do not bind myself, in my arithmetic, to a quarter per cent either way. It has increased by one-sixth of what it was last year. That, of course, is a percentage we should like to hear from Deputy de Valera as regards employed persons who are subject to PAYE. The deduction now is 5/3 out of £1 instead of 4/9. The ordinary taxpayer not subject to PAYE must pay 8d more this year than last year and can pay up to 14/6 out of every £1. If that is a percentage of which the Minister for Finance and the Government can be proud, the sooner they go out among the people and ask them if they like those percentages the better.

The section is concerned essentially with the rate of income tax. Once that has been debated there is little else to be said on the section. There is one point, though, on which Deputies opposite have been somewhat obscure. They talk about the intention of Part VII. I do not understand the argument that there is any lack of certainty about what Part VII did. It did something very like what Resolution No. 19, which was withdrawn, would have done. The situation in relation to that Part appears to me to be perfectly simple. As Deputy Sweetman has said, there is no doubt as to the primary purpose of the legislation. The weakness was in the over-cautious drafting of it from the point of view of its implementation. The drafting was such as to capture practically anything. Deputy Sweetman challenged me to advise him on that and I said it captured practically anything.

This raises the principle of precision in taxation. At first flush it may be administratively easy to provide precision if one can foresee all contingencies and rely on rational implementation but we are now experiencing administrative complications. Again I am taken by surprise. I did not intend to refer to this on section 1 but Deputy Byrne opened up a field on this point and I should like to content myself with the remark that there is no doubt about what is the intention of the section, and the charges Deputy Sweetman made against the Minister were unfair and unfounded. I repeat that they were unfair and unfounded. The difficulty I see in the legislation is one of precision in taxation.

The Deputy is saying exactly what I said—that there were grave difficulties about it. The Minister said there was none.

There is no difficulty about interpretation.

Now the Deputy is changing back again.

I said there are no difficulties about interpretation. It is quite clear that it captures anything in a sense. I am saying that the Deputy was not fair in what he said about the Minister in this regard. The difficulties which have flowed from this are difficulties in the drafting and framing of these provisions, designed for a purpose of which we all approve, which through the understandable motives of over-caution or over-provision—a very natural desire that anybody drafting such a provision would have—would make sure that the thing would be effective. I am sure the consequences have flowed from that. The problem here for the Minister is, in fact, a question of amendment and drafting essentially, if one looks at it from that point of view. I have got on my feet mainly to point out that Deputy Sweetman was not altogether fair or objective to the Minister in that regard.

Even though I did not hear Deputy Sweetman——

Would the Minister like me to repeat it quite quietly? I was talking about Part VII of the Finance Act of 1965. The Minister came in here one day and informed the House that he had neither received nor heard any complaints in relation to the interpretation of Part VII. Within a matter of a few days afterwards, the Revenue Commissioners had an advertisement in the Press that they were setting up a special section in O'Connell Street for the purpose of dealing with difficulties which were arising in relation to Part VII of the Act of 1965. I said in relation to that that there appeared to me to be two possible explanations only of the statement made by the Minister for Finance in the House: either he did not know what was happening in his Department and did not know what complaints had been made, or he was telling the Dáil an untruth. I do not believe the last one: I do not think he was telling the Dáil an untruth. It seems to me perfectly clear that he was not aware of what was happening in his Department; that was the only alternative left open to me.

I shall not keep the Minister very long, especially on income tax. Some years ago this PAYE system was introduced and I thought it quite a good idea at the time. As far as my memory serves me, the body which is accepted as being the voice of the wage and salary earners also endorsed the introduction of the PAYE system. As a matter of fact, they had advocated the introduction of this system for quite a number of years and were pleased that it was introduced. But whilst I still think it is a good system, when one relates it to the payment of income tax generally —I think Deputy Byrne referred to this while I was out—it cannot be said that those who operate under PAYE are, to put it bluntly, getting a fair crack of the whip. I do not want to labour this point; I think Deputy Byrne may have mentioned it, and I mentioned it before.

It must be abundantly clear to everybody that a person who is in receipt of a wage or salary, whether paid monthly, weekly, or quarterly, cannot in any way evade his responsibility for the payment of income tax. There is no escape. Under this particular section, he will, in fact, suffer a wage cut by reason of the increase of income tax from 4/9d to 5/3d in the £. I wonder if the standard rate of income tax would be 7/- in the £ if all those who should by law pay income tax were, in fact, paying it on their taxable incomes. The Minister's predecessor, two or three Budgets ago, introduced a measure or made proposals in a Finance Bill or, possibly, in a Budget Statement, for the detection of tax evasion. I still do not know what, if any, results there were from that particular proposal or whether, in fact, anything was done.

Those who are interested in the introduction, or even the consideration, of an incomes policy must also have been impressed by that part of the Report which talked about the income of people who could be deemed to be self-employed. They advocated very strongly that these self-employed people should be required to keep accounts and they spoke particularly about professional people. In any case it seemed by inference from what they stated that there are an awful lot of people in this country who do not and who were not required to keep accounts. That, according to their argument, was for the purpose of trying to evade income tax. If they are not required to keep accounts, if their actual income cannot be ascertained, it surely means that there is some evasion of the payment of income tax. As I said, an employed person—whether a civil servant, a road worker, a clerical worker, a tradesman or whatever his occupation—has got to pay right down to the last penny because his employer will do that every week or month on his behalf.

Mind you, there is another factor in this as well. Many of those people have not an idea of all the allowances to which they are entitled. I assume that the income tax offices throughout the country help them in the preparation of their claims. Therefore, I think —and I referred to this in my speech after the Minister set out his proposals —some effort should be made to ensure that the tax burden will fall fairly and squarely on the shoulders of all those who, under this law, are bound to pay. I do not know how much money is involved but I do not think anybody in this House will deny that there are many who do not pay their fair share of income tax related to their incomes. I do not believe either that the original income tax laws were framed to ensure that any single person who had £6 per week should pay, out of any balance over and above that, a sum of 5/3d in the £. I do not think the income tax code was ever designed or intended to make that sort of person with £6, £7 or even £8 per week pay income tax.

The allowances were the subject of a motion which the Labour Party had before the House last autumn. We advocated that the various allowances, personal allowances and dependants' allowances, should be increased. We also advocated that children's allowances should be increased as well beances had no relation in the wide earthly world to what was originally intended. The Minister did increase the children's allowances but still within a certain wage group.

Much emphasis has been placed here on production and incentives, particularly with regard to industry, and there are certain tax allowances given to industry for the purpose of encouraging them, not alone to produce more but particularly to export more. One of the big factors in the wages or income of many tradesmen and operatives is the income tax they must pay on overtime. I believe they should pay some income tax on their income but if a man is required to work over the stipulated 42 or 44 hours per week—I know he is compensated in that he gets time and a quarter, time and a half, or, perhaps, double time for Sundays— the Minister should consider, if not in this Finance Bill, in the future, some sort of incentive for those required to work overtime, particularly in producing industries. Over and above all this, the Minister should have regard to the inferences, if not statements, in the NIEC report, to ensure that those who can pay, those who have the income, are made to pay their fair share of income tax. I am not qualified to talk about business and about industries and their profits but I am particularly concerned to ensure that those who are self-employed will pay their fair share of tax.

Some years ago income tax did not bother ordinary workers because allowances related to their wages and salaries at that time meant that they need not pay income tax. Wages and salaries have increased, particularly in the past five or six years, and so has the standard of living, but what has trailed behind and has become an impost and a burden on those workers is the fact that these allowances have not changed. Therefore, the Minister in his autumn Budget—if he is going to have one—should consider these allowances because they certainly can be a deterrent to increased production and above all, should ensure that those who, according to NIEC ought to be required to keep their accounts, should do so and that they should be taxed on their incomes and that there should not be any "fiddle". With all due respect to this particular section and others, I think the Minister must understand that there is "fiddling"——

What class of person has the Deputy in mind?

I do not want to name any section but I mean professional men, some professional gentlemen. The Deputy may go to one of them or I may go to one of them and give him £5——

What about the self-employed man producing something, the farmer, for instance?

Yes. I believe farmers are afraid of their lives of income tax, but in fairness to them, I suppose the great majority of them would not be required to pay income tax. Any time anybody mentions income tax in relation to the agricultural industry, every farmer, even though he may have only five acres, thinks that he is going to be made pay income tax. They should not pay income tax unless it is proved that they have a certain amount of money. There are big farmers who are not paying income tax and who should pay it. The majority of them, if we are to believe the statements of the Minister for Agriculture, the NFA, and the ICMSA in regard to their yearly income, would not be required to pay income tax if they have not got the money but the person who is in the farming industry and whose income is £2,500, £3,000 or £3,500 per year should be examined to see whether or not he should pay income tax.

Is he evading tax at the moment?

No. Under the law he is not because he pays it on valuation.

Therefore, the Deputy it advocating higher taxation on farmers.

Yes, he is.

The Deputy is merely saying that if the farmer's income is such as I have mentioned, he should pay income tax.

Higher taxation on farmers.

That will get the Deputy a few votes around Rathdown. He will need them.

I wish to make a very brief interjection apropos what Deputy Corish was saying. The Deputy is concerned about the position of the PAYE taxpayer, as I am concerned about it, and he is also concerned about evasion and he inter-connects the two, quite rightly. Because of this consideration of social and distributive justice, the salary-earner or the wage-earner under PAYE has a chip on his shoulder. The country business person, the country shopkeeper—I shall not say the big Dublin shops—will not be stopped from “fiddling”. It is impossible. When he is emptying his cash register at night, everybody knows, including the inspector of taxes that he pockets at least £1 out of the £10 or £20 takings for the day. It would be contrary to human nature to try to stop that. The accountants acting for these individuals frequently know this and they give very restricted certificates with their accounts. Inspectors of taxes know this. That leads to a situation in which, if you can do nothing about it, how can you create a situation which has regard to distributive justice as affecting the wage-earner and salary-earner? You come back to what I was stating in the Minister's absence: you recognise the inherent difference in concept between income which derives from wages and salaries and income which derives from business profits. You tax wages and salaries on a different basis by reason of that inherent difference in concept. The mechanism is there by reference to earned income level. You give him a higher rate of earned income relief.

Deputy de Valera brought up the question of whether farmers should be taxed or not. That should be noted, that a member of the Government Party introduced the subject of taxation of farmers.

I merely asked Deputy Corish a question. I did not introduce it.

The Deputy provoked the whole discussion.

It is obviously a very sore point with you. Qui s'excuse s'accuse. I was merely asking a question. “Methinks the lady doth protest too much.”

Last year Deputy de Valera introduced a subject for discussion and we have a section put into this Finance Bill as a result.

We shall come to that.

There is a great deal of political evasion, apart from income tax evasion. On the question of the suggestion of taxation of farmers which has been postulated by Deputy de Valera, all we are saying is this: no farmer should have to pay tax unless he is getting sufficient to justify it.

Is that not simple?

There is already provision for farmers to pay tax. Surely you do not want to crucify them altogether?

As a man who has to work for wages or salary, I am saying what should be done: the question of the mechanics is another matter.

It is a very different matter.

I suggest it is not the mechanics of the problem that deter the Government but the politics of it. It has been accepted in the House almost as axiomatic that you do nothing which will even remotely frighten or tend to frighten away the agricultural vote. That is the basic political fact and that is what Deputies opposite are thinking about, not the justice of it at all—that does not enter into it. It is not a question of justice. What they are concerned about is votes.

What are the Labour Party concerned about?

The Deputy is welcome to the few votes he will get in Dún Laoghaire and Rathdown on that argument. It will not turn back the tide which began there a fortnight ago, the tide which will submerge quite a number of people in its own good time.

I hope the Deputy is able to swim.

I have floated fairly successfully for the past 16 years and I hope the Deputy will have the same luck in the time that he has ahead of him.

I wish him better than the Deputy enjoyed.

Deputy Dunne has certain advantages.

That is very nice of the Minister. I appreciate it. It has been somewhat troublesome at times.

On the question of the position of farmers vis-à-vis taxation generally, farmers, as we know, and as the Minister has stated, are getting about £50 million in subsidies from the Exchequer.

A Deputy

£60 million.

I am corrected by a Member on the Fianna Fáil benches who says that it is £60 million. Nobody quarrels with assistance for the agricultural community where it has to be assisted. There may be doubts justifiably expressed as to the extent that this assistance is truly warranted. The arrival of pickets by taxi from expensive hotels is not a convincing argument as to a depressed economic condition. However, that may be superficial. I shall not make a particular point of it. Indeed not for one moment do we think that the Government will alter their policy and, in the words of Deputy Byrne, take a hard look at the tax structure. Nor do we think that the Government will run the risk of offending these large landlord farmers whose income is a multiplication of the income of the average wage or salary-earner in a city or town, and who are completely tax free. These are not many. I would not think they are very numerous but they do exist.

I would say that a source of a considerable amount of possible revenue is being neglected by reason of the Government not applying their mind to the collection of tax from these very large farmers. I want to underline and emphasise that so that it will be understood where the Labour Party stands in relation to this. We stand for the small farmers, for their protection and support equally with any other Party in this House and we, perhaps, are more concerned for them in the true sense of the word.

How large is a large farmer?

How large is a large civil servant?

We are talking about farmers.

We are talking about incomes. How large is a large civil servant?

Will you let the decent man make his speech?

Perhaps Deputy Dunne will be allowed to make his speech.

How large is a large farmer?

It is all according to his income.

How large is a large income for a farmer?

Or for a civil servant?

We are not discussing that. Deputy Dunne is in possession and should be allowed to speak without interruption.

May I use another term—excessive income? I want to thank my esteemed colleague from a very representative constituency for trying to bring his disorderly colleagues within the ruling of the Chair. Deputy Burke knows what a large farmer is. I would suggest, with all due respects, that we have perhaps closer contact with the agricultural community by virtue of the area from which we must commute and generally circulate in than the Deputy who is doing all the interrupting here, Deputy Booth.

I just do business with them.

I know you do. You make money from them, of course.

That is the whole point of the exercise.

I am glad that Deputy Booth has dropped the mask of philanthropy and admits he is not doing it out of the charity of his heart.

Like Deputy Dunne.

These interjections may be interesting but they are irrelevant.

Deputy Dunne has never been elevated to the height of being a business man. Deputy Dunne was a trade union organiser of agricultural labourers when he came into this House and has remained a labour representative in this House; he has never had people employed making money for him.

Let us discuss section 1 of the Finance Bill.

Deputy Booth insists in discussing his business here. If he wants to make a public issue of it, let us talk about it.

It was not I who brought up his private affairs. If he wants to parade them publicly, that is a matter for himself.

Just to return for a moment to this question of the incidence of income taxation, Deputy Corish quite rightly spoke of evasion. Not alone is there evasion, there is an industry in evasion. It is an industry in itself. We all know that there are people, very decent people, whose occupation in life is seeking out the loopholes in tax law.

That is not evasion; that is avoidance.

There is a distinction without a difference.

A very important distinction.

Deputy Byrne, in referring to the small shopkeeper, used the word "fiddling." I regret that that word should be used here. I do not think that such a word should be applied to that fine and respectable body of men, small shopkeepers and small businessmen generally.

That would not happen in our constituency.

Apparently it happens elsewhere. As Deputy Burke will appreciate, we must take the national view, as he has so often done, when it was more awkward to take the particular view.

Taking the national view and looking at the picture in that way, there is tax avoidance or evasion. I hope I was mistaken in taking Deputy Byrne as making the point that this is O.K., that it goes on and, because it goes on, it is all right, it is inevitable, it cannot be corrected, nothing much can be done about it. Is it all right? What is the moral law on this question? It is not a matter that can be resolved by discussion in this House. It is the subject of discussion at various levels outside the House and it has been a matter of contention amongst all kinds of people at all levels of society as to what is the moral aspect of tax avoidance. It is not a matter with which I would concern myself. There are others in this House far more qualified than I am to deal with questions of morality, I am sure, but I would say that, if it is the law that tax should be paid, that law should be applied to everybody with equal kindness or severity, as you will.

It is a fact that the wage earner and the salary earner pay their tax.

I am sorry; I have to go on business. I should like to have heard the Deputy.

Is the Deputy going to collect the sixpences in the little tin box?

It is all right; he is probably going off to Strasbourg. The worker is trapped inescapably by the collection machine. On the other hand, there are many people, professional people, as Deputy Corish instanced, who are in a position to evade or avoid income tax. I am quite certain many of them do not do so, although they could. But there are many who do. It is true also that many businessmen probably find themselves in a position to evade or avoid paying income tax and avail themselves of that opportunity. It is a human enough failing. I suppose any of us, if we were in the same position, could be guilty of it. But that does not take away from the fact that nobody, so far as it is possible for us to arrange matters, should be put in the position of being able to evade tax. It goes on, and on a pretty widespread scale, and the sufferers are the ordinary workers, the wage and salary earners.

I am not one who is given to undue thought in relation to the trials and troubles of civil servants. I think most public representatives have at times felt that civil servants, dealing with matters which Deputies bring to their notice, might move somewhat more speedily, but, on behalf of the Civil Service, I would say that these people render an important service to the country. They are caught inescapably by the taxation system. Whatever the law lays down, they must pay because tax is deducted at source in the same way as PAYE is deducted at source. These are the main contributors of income tax to the Exchequer. Many other classes manage to evade their responsibility. That is not right.

The Minister should, as has been suggested, in his next Budget—he is a man with a Budget apparently for all seasons—produce something which will make the income tax laws more effective in so far as they relate to the classes to which I have referred. I shall be compelled to leave the matter of the farmers over until there is a change of Government.

It would be as well to drop that one.

I do not think so. A great many people, especially the political neophytes I see around me, make the mistake of thinking the people of this nation can be easily fooled. They also think the people want to hear sweet talk all the time and cannot listen to facts or to the truth. That is the mistake they make. The Irish people can take long, hard looks at their own condition. They know what the facts are and our political history has shown that, even when difficult or unpopular things had to be done, and were done, while politicians might run away, the people did not.

Deputy Booth says it might be as well to drop that one. That, of course, is political expediency at work in his mind and the hope expressing itself that we will forget these unpleasant facts and roll along nice and easily, keeping things going, and the boat will not be rocked. But life will not have it that way. The people will not have it that way. Facts are things that cannot be put down and the fact is that there are in this country a section being compelled to pay income tax, and another vast section not even looked at from the point of view of income tax. Amongst that vast section are people who would be well able to pay but who are not being asked to pay. That is the position as we see it. Again I emphasise, so that there can be no possible misrepresentation or misinterpretation of our stand in this matter, that we accept that there are great numbers of farmers who, if their means were assessed, would not fall liable to income tax under our present system. We also believe there is a considerable number who, if their means were examined, would fall liable. These moneys are being allowed to go by default by the Government purely for reasons of political expediency.

There is another aspect of the incidence of income tax to which I would draw the Minister's attention. I am sure that has been done by other speakers. I refer to the disincentive effect of taxation. We live in a time when workers are being continuously and monotonously, almost boringly, adjured to produce more. In securing greater production, the question of overtime working arises. I have met many workers who tell me that, because of the application of income tax to their packets, it is not worth their while to work overtime. Overtime in itself is not a desirable thing and anybody who has suffered overtime—I say "suffered" advisedly —agrees with me that there is a certain number of hours during which the average worker is able to work at his best; after that, his effort progressively slows down. Overtime working seems to go against nature. Even the shift system seems contrary to normal, natural methods of work.

Now, if we are to encourage people to produce more and if, with that object in view, we ask them to work overtime, then we must reward them. Single workers and workers with small families are at the moment being discouraged from working overtime simply because of the fact that the State comes along and rifles their pay packets at the end of each week for income tax purposes. All this is, of course, related to the whole question of an incomes policy. An incomes policy was suggested in the NIEC report. We discussed that report here earlier this year. It was adopted formally by the House without, I think, any dissenting voice. The question of an incomes policy was touched upon, but not in the detail it should have been. The whole question of greater production depends upon the development of a proper incomes policy. It is here a start can be made. The Minister can encourage greater production by lessening the burden of income tax as it falls upon those workers who are required to work overtime.

I would ask the Minister to consider these points, and consider them carefully. I would ask him to put them into operation, if he can. It would appear it is not his intention to do so now, but I think they are valid points and the setting up of machinery to prevent the wholesale tax evasion that now takes place is of vital importance.

Nobody will disagree with the Deputy's proposition that the incidence of taxation should be fair and uniform. Nevertheless, I think his development of the picture is somewhat distorted. Deputy Dunne would leave one under the impression that a large amount of money was lost through evasion, that a majority was evading and a minority was paying. We had better look at the facts to get that in proportion. The bulk of individual payers of income tax—I have not statistics and I am open to correction—are those who are paid salaries and wages and, as the Deputy quite rightly pointed out, there is no escape for them. Income tax falls on corporations but, in most cases, corporations have got audited accounts. The task of the Revenue Commissioners is relatively clear and is often negotiated with the help of auditors. That leaves only two categories to be embraced in Deputy Dunne's indictment and these are professional and agricultural. There is the general class, to which Deputy Corish referred, and, additional to that, there is the agricultural community.

In regard to the professional and the self-employed classes, there may be, and everybody will agree there are, opportunities for evasion. Human nature being what it is, there is the possibility that, in cases, there are evasions. But let us not under-estimate the efficiency and the devotion of the Revenue Commissioners. Let us not think that the Revenue Commissioners wash their hands in these cases. The fact is that any professional or self-employed person with any sizeable business is paying income tax. I must admit the a priori possibilities which Deputy Dunne says are there. That the actual rates of payment and the incidence of income tax falling on these people are or are not exactly parallel to the wage-earning classes is a different story. That is a question that is probably a problem for the Revenue Commissioners. They are doing the best they can. Let us get our picture clear. I would need convincing that a large amount of revenue is lost to the State through that source, on the one hand, or that there is much disparity in regard to these things: there may be some disparity.

Now let us come to the agricultural side which Deputy Dunne was very keen to saddle on my back. There is a very good case for tax reliefs to our farming community and I, a city Deputy, say it. They are our primary industry and this country is dependent on our agriculture and our agricultural produce.


Hear, hear.

That is the plain truth.

You are running away from it.

I am not. I am telling the truth. We, as a community, are depending on our agriculture in this country and that is the whole basis of our economy. Deputy Dunne wants to saddle me with something. He has got his answer which is that there is a very strong case for special reliefs for our agricultural community. Deputy Dunne has, himself, given the second answer. In our agricultural setup, we have a large number of small farmers with small units. I completely agree with Deputy Dunne that, on investigation, by comparison with non-primary producers and other people in this country, even under the existing code, an assessment would probably be nil.

Hear, hear.

I think Deputy Corish will accept from me that my question to him was not meant to put him on the spot for a smart political motive.

Deputy Booth did that.

It was Deputy Dunne's anxiety to protest too much that has brought this turn into the discussion. However, I agree with Deputy Dunne on that. Now, with regard to what Deputy Dunne has called the large farmer—the definition of which has not been forthcoming in the House and neither do I intend attempting a definition now—sin ceist eile.

Is ceist eile í sin.

Is bun-chloch na tíre seo an roinn talmhaíochta agus na neithe a bhaineas leis. The foundation of our whole State is our agricultural community. Not only that but our agricultural community and our rural community are the foundations of a vigorous society.

Nobody is disputing all that.

Deputy Dunne wanted to wrong—foot me. I am giving him the answers. Let us come back to income tax. Let none of us think that the Revenue Commissioners are either inert or inept. From the point of view of most of the community they are a little bit too energetic and too able. My complaint with them in the past and generally, if I get up here, has been rather that they have not had enough self-confidence or whoever is providing them with the law has not had enough confidence in their energy and powers and has sought to give them more powers than were really necessary with results that were unforeseen and we were back to that matter a little bit earlier. Deputy Dunne complains that the law will not catch people. Other people, including myself, were complaining that we were making the law too all-embracing. In other words, the mesh of the net was too fine. You cannot have it both ways. It is obviously a matter of balance.

In principle, I want to oppose Deputy Dunne. If he has any constructive suggestions they could be brought forward by way of amendment. I think the Minister and the rest of us would welcome them. At least, Deputy Sweetman has tried. I really did not get the depth of that amendment until he explained it to me but at least Deputy Sweetman has given us an amendment.

I have one here, too. It will bear very much upon the problem I was talking about. I should be glad of your support for it. It is that, before section 8 in Part I, to insert a new section. You will have an opportunity to read it. It is to provide that workers shall get an allowance in their income tax assessment for money they pay going to and coming from work by way of these exorbitant CIE bus fares.

That has nothing to do with what we are discussing at the moment. We shall not help the discussion if we get distorted pictures. I have attempted to analyse it. It is a distortion to suggest that the bulk of people are in one category when, in fact, the bulk are in the other. That is the net answer.

I could not allow the occasion to pass without sincerely congratulating Deputy de Valera on the fact that he now recognises after all these years that the farmer is the backbone of this country. That certainly is a conversion.

No; I have said it before.

At least it shows that after many years someone in the Fianna Fáil Party has come to realise the importance of the farmer and the standing of agriculture in the community. We welcome that. I hope we will be hearing similar sentiments expressed by every other Deputy who realises the importance of the farming community, be they big farmers or small farmers.

The question of professional people evading income tax has been mentioned. Nowadays the farmer can be regarded as a professional person. How can any Deputy say that a farmer, big or small, should pay income tax when we have agriculture in such a depressed state today? Never before since this State was founded was it in such a condition of depression. Some of the money to be raised by this additional taxation will be used to assist farmers improve their income. Some millions are provided by the State to assist farmers by way of grants, subsidies and loans. Surely, if farmers were so prosperous as to be obliged to pay income tax, it should not be necessary to provide millions to help them with loans, grants and subsidies? If the farmer was in an independent position and his income such as would warrant the payment of income tax, there should not be any necessity for this House to provide funds to help him.

I want it to go on record that I bitterly oppose the suggestion from any side of the House that the farmers of this country should pay income tax at any time. I feel there is a growing tendency in this regard in the House. The thin end of the wedge has already been driven in regard to an effort to make farmers pay income tax. Any such effort is bad and will not help the economy of the country. I hope we have heard the last of an effort, either now or in the future, to compel farmers to pay income tax. It is even unreasonable that income tax inspectors should send the various claim forms to farmers for completion. It is a fact that the district office of every inspector of taxes has received from the local authority the valuations of various farms. The claim forms are dispatched to the farmer.

That is a question of administration that may come up on an Estimate.

I will not pursue the matter further. If the Minister for Finance is as sympathetic to the farmers as Deputy de Valera has conveyed to the House, then I am sure we have heard the end of any effort to seek to make farmers pay income tax.

The PAYE system imposes a great hardship on taxpayers at present. Under it wage-earners are not encouraged to work overtime. We have had appeals from the Taoiseach, from the Minister for Industry and Commerce and from no less a person than the Minister for Finance asking our people to work harder and produce more. We have had on more than one occasion replies from Ministers to various trade unions saying the workers are not working as they should or producing the amount the nation expects them to produce. I have had the experience of industrial workers and other workers in my constituency and other parts of the country who would gladly work overtime. I have known many instances where overtime was available but the workers declined to accept it because they felt they would be only handing it over to the income tax authorities. If workers are good enough to work overtime, if their management ask them to do so, it should be sufficient for their basic salary to be subject to income tax. When the country needs more production and a greater return from its manpower, it is wrong if we tax the worker industrious enough to work overtime. As I say, I have known many workers who declined to work overtime simply because they felt it was only a matter of getting it with one hand and handing it out with the other.

The allowances made under PAYE are absolutely insufficient. With every increase in wages there appears to be a greater amount paid over to the income tax authorities. The allowances for dependants and for the education of children are insufficient. When a child goes to school at four or five years it has to be prepared and clothed and provided with books. Some generous allowance should be provided for the wage-earners for the education of their children from the time they go to school.

Time and again we hear references here to the section of the community who are evading the payment of income tax. I should like to know who they are. There is an income tax section under the Revenue Commissioners. I think I could describe them as probably the most vigilant section in our community. I doubt if anybody in receipt of wages or salaries escapes the eye of the income tax inspectors at present. I do not know who they are but the income tax authorities have been pressing very severly a section of the community that are least able to pay income tax. In many instances, wage-earners who have family dependants are not granted any allowances, and many of them have to travel distances to work, a point which I think Deputy Dunne covers later on. The time has come for a complete review, with greater sympathy for and greater understanding of the position of workers who are obliged to pay what I consider to be more than their share in income tax. My complaint is that at present the set-up is too rigid. Some Deputies complain that it is not rigid enough in regard to certain members of the agricultural community who, they say, escape the payment of income tax. I cannot subscribe to that idea and, as I have said, any effort made in this House, either now or in the future, by the Minister for Finance or any other Fianna Fáil Minister for Finance to impose any heavier impositions by way of income tax demands on the agricultural community will meet the strongest opposition I can possibly give to it.

(Cavan): Section 1 of this Bill proposes to increase the standard rate of income tax from 6/4 in the £ to 7/- for the current financial year. That would appear to be an increase of 8d in the £ in the rate of income tax, but, of course, it is far more, because, with one exception the rate of allowances remains static and the value of money has become less and less. It is high time the rate of personal allowances was increased. It has remained static now for several years, although the value of money is drastically reduced and the cost of living is increasing. Therefore, the House and the country should realise that this is much more than an increase of 8d in the £.

It is bad enough for wage-earners, for industrialists or for anybody else who has control over his income, or who can agitate for or demand an increase in his wage if he is a wage-earner or negotiate with his employer and, failing that, by resorting to strike action, do something to offset this impost of an increase in the rate of income tax; manufacturers, business people, professional people, within certain limits can do likewise. However, the object of my standing up here this evening is to make an appeal on behalf of retired persons, on behalf of people living on fixed incomes which they cannot increase, people who have retired and who have seen better days, who have served the country well in one capacity or another.

These people find they are now liable for an increase of 8d in the £ in the standard rate of income tax, while the value of their comparatively small income is contracting. It is most unjust, it is inhuman, that the personal allowance of retired people on a fixed annual income should not be increased, and increased considerably, to compensate them for the increase in the cost of living, the reduction in the value of money and the increase in the rate of income tax. It is true that in response to pleas in this House, something has been done in regard to the rate of allowance for secondary schoolgoing children. That is to be welcomed, but it is the only field in which the Minister has done anything to relieve the hardship on the incometax paying community.

It is hardly necessary to make a case at any great length on behalf of these people, whether they are retired civil servants, retired local government officials, or people who have retired from private business or private occupations, anybody who provided for himself or herself an income on which he or she thought it would be possible to live in retirement. Such persons now find themselves being attacked by the Government and by the Minister and having their standard of living reduced drastically at a time when it is beyond their capacity to do anything about it.

It is even worse than that, because many of these people have been encouraged down through the years to invest their savings in Government loans, and the capital value of these Government loans has been depressed by Government action. Loans which they were encouraged to invest in and which were worth £100 at par are now worth only £60, £70 or £80. These people have a real grievance and it is a poor state of affairs if that is the only consideration a Christian Government in this so-called Christian country are prepared to give to this category of people. I do not know what it would cost the Minister for Finance to be decent to these people, to treat them in a humane manner, but I believe if some of the extravagance that is going on were cut out, it would be possible to treat these people properly.

This is not a matter of making a case for these people now that the Budget has been introduced and that the Finance Bill is before the House to implement the Budget Motions were put down by this Party and by the Labour Party in the early months of this year calling on the Government to do something for the category of people about whom I am speaking, but the Government turned the deaf ear to it. As a matter of fact, this Government have very little consideration for the weaker sections of the community. Perhaps the General Resolution is a more opportune time to discuss this, but just to give an example of the attitude of the Government towards the weaker sections of the community, the Budget was introduced in March of this year and was supposed to distribute the wealth of this nation. That is one of the functions of a Budget. It made certain provisions for the social welfare classes and then the Budget debate was not really over until up went the cost of living. It has gone up two or three times since—and I will have more to say on that on another occasion—but still the social welfare classes were provided for in the Budget. I give that as an example of the tendency of the Government to disregard people on a fixed income. They are disregarding the unfortunates of this country who are on a fixed income, in the declining years of their lives. It is a disgrace and something about which a protest should be registered here. That was the principal reason I got up, to register that protest.

In regard to subsection (3), when the Finance Bill was introduced last year the Minister was explicit in explaining that he was throwing out the net to bring in others and his main preoccupation was with speculators and others in regard to matters affecting property. I now understand that in its application by the Revenue Commissioners this provision applies to profits made on the sale of any property and there is no differentiation between the speculator and the ordinary house-owner. I should like to get a more explicit explanation from the Minister as to what category of people comes within this section. I know several reasons why it should not be widely applied. There is the simple reason that a private person with property may, for one reason or another, wish to form a limited liability company and transfer that property to the company. On that transfer will the question of profit be taken into account and come to be taxed? There is also the question of amalgamation for greater efficiency in the field of industry and business management. Will these operations come in under the collector's net? These are points which I should like explained fully. I have no brief for the person whose business is speculation, buying a house, improving it and then re-selling it. If such people were escaping before then it was time they were brought in. However, I have some regard for the efficiently run business and the amalgamation of business which will take place in the future if we are to build up an efficient——

On a point of order. Are we discussing section 1? What has this to do with the section?

It comes in under subsection (3) in regard to income tax and surtax. When we move on from this I do not think there will be another opportunity to speak on it. I am applying it to the sale of property by the private individual who will come in for assessment for taxation purposes. I have been asked numerous questions about this and whether if a man bought a house four years ago for £2,500 and sold it today for £4,000, after the 1965 Act, the profit is assescient—— sable for income tax and surtax in the one year? So far as I know it is. That is one aspect.

Another is the question of the private individual or the private business with some assets and property worth, say, £6,000 or £7,000. If that individual or business decides to form a limited liability company and decides to transfer those assets to the limited company, will they fall in for taxation on that profit, as it were, between the price originally paid for the property and the price they might transfer it in at? These are questions which can have some relation to this section. I am not clear, and I do not think many other people are clear, about this section especially in regard to the provision which was brought in to catch the speculators, the people who are buying houses, converting them into flats and making a large profit on the transaction. By and large, those people were escaping heretofore. All of these people have more or less been incorporated in this. There was the company which endeavoured to syphon off some of its profits from the sale of property to another company, and in that way make a capital gains which did not come in. That has been sealed off but in sealing it off a lot of innocent people have been caught up. I should like the Minister to be a little more explicit about these matters.

When I was speaking before, I was talking about the avoidance or evasion of tax by certain tax classes and I mentioned the self-employed. I spoke about evasion under the present income tax code by those who are liable for the payment of income tax. I do not know whether Fine Gael and Fianna Fáil deliberately tried to insinuate or allege that the Labour Party wanted a further tax on farmers. This seems to be the idea of both Deputy de Valera and Deputy Booth. I can assure Deputy O.J. Flanagan that he will not be called on this year, or next year, or the year after to conduct a spirited defence against any suggestion of taxation because even if the income tax code as we now have it was applied to the farming community only a certain number of them would be required to pay tax. For example, a farmer with a wife and two children need not have any concern, if the code was applied to him, if he has approximately £1,000 a year, which is £20 a week. The same farmer can earn a certain amount over and above what we are told he is earning now and he would not be subjected to income tax.

There is no point in anybody talking about the depressed state of agriculture. That is true if you think about the agricultural industry generally but I do not think anybody will deny that there are some people in agriculture who are doing pretty well out of it. They may not be in the majority. If we believe what we are told by the NFA and the ICMSA the average earnings are something like £300 a year which is £6 a week. These people need not be worried. Anybody whose income is not at a certain level does not have to worry about it. Nobody need talk about defending the agricultural community against any attempt to apply the income tax code to them. I referred to the evasion of tax, or, as Deputy Byrne prefers, the avoidance of taxation. I still stick to what I said despite what Deputy de Valera said. I believe there is evasion and I was going to give examples when I was talking about the agricultural community.

I am talking now about the evasion of tax within the group liable to taxation. As far as incomes generally are concerned, I think we have to talk about them some time. I do not think Deputy Booth, Deputy de Valera, or I, or Deputy O.J. Flanagan or Deputy Dillon could avoid talking about incomes generally some time. There are some farmers who are doing well indeed. As far as we are concerned, in the application of the aids to which Deputy O.J. Flanagan referred, we are concerned to see much more of this money going to the small farmer and not, as happens, going to the big farmers who do not need it.

I should like to support my colleague, Deputy T.J. Fitzpatrick of Cavan, in the matters he raised today. We have to raise the revenue somehow. I suppose that in the circumstances in which we find ourselves it is not unreasonable to ask the people to pay income tax, to bear their share of the burden. I give great force to what Deputy Fitzpatrick has said. I do not want to paint a picture that the Minister for Finance is a savage, out to tear everybody to pieces; nor do I think it is true or just to paint the Revenue Commissioners as a kind of public enemy. I have been a long time in this troubled world and to any person who ever came to me about his income tax, my advice was: "Go down to the tax inspector, if you have nothing to hide. He is probably the best adviser you can find, that is if you have nothing to hide. Put you cards on the table and the tax inspector will see that you get every allowance to which you are entitled under the law. If you go down and if you want to put your finger in his eye, you will find he has a very tough eye."

That is what he is paid for. Sometimes we are inclined to be carried away by our eloquence in this House and to assail indiscriminately those of the public service who, in fact, are more entitled to our praise than they are to our strictures.

I do not underestimate the Minister's difficulties in dealing with the problems raised by Deputy Fitzpatrick but I think it is universally experienced amongst us all that there are a great number of elderly people in this country who have retired on pensions or who have retired with a modest capital sum which they perhaps realised on the winding up of a little business or something of that kind and, as Deputy Fitzpatrick would say, on our advice. They have, not infrequently, invested that modest capital sum in Government stocks and, mind you, on both sides of the House we have to plead guilty. When the Minister for Finance announces the flotation of a National Loan, it has long been the practice in this House to commend it from all sides of the House, and to recommend people to invest their savings. I have often quailed in conscience when I think of recommending a National Loan of 3¾ per cent to unfortunate elderly people who have money to invest when I said: "Well, the Government want us to put it in a loan." They put it in and they have lost 20 to 25 per cent of their capital.

This adds strength to the case made by Deputy Fitzpatrick today. These people have a fixed income. Being a shopkeeper myself, I have detected in the last six or eight weeks in rural Ireland a collapse in the retail trade. That is due in rural Ireland to a variety of causes—closing of the banks, the bad price for cattle in the late spring and a variety of matters of that kind. I walked into a shop recently in Dublin and inquired of the shopkeeper: "How is trade with you?" He said: "It is awful." I said I was surprised and he said: "Oh, well, I do not mean that I did not sell anything; I sold today." But, he said that the situation is growing in which the customer who comes in to him to buy a pair of braces buys them because he needs a pair of braces, but when he has paid the grocer and the butcher and paid for the children's clothes and everything else, there is no money left to pick up a tie or a canary-coloured waistcoat or anything else the shopkeeper has to sell.

Those of us who are still engaged in business or trade, or professionally, do not, I think, feel the same pinch as the person who has a fixed income and who cannot supplement it, owing to age or infirmity, from some ancillary source. There is no doubt whatsoever that as the burden of taxation grows we all feel ourselves getting a bit poorer. We have to do without things we ordinarily would not do without.

I met today walking on the streets of this city a man who is 70 years of age, a man whom I knew, when he was practising his profession, to be a person in relatively affluent circumstances. When I say affluent, I do not mean rich, but very comfortable. He stopped me in the street and apologised for his shabby appearance and said: "To tell you the truth, I am hard set to keep going on the pension I receive from the State." He entered the public service at one stage of his professional career. He ended in the public service and is now on retired pension. I am sure the Minister meets in his own experience a number of people of that kind. The man who has been in the State service and who belongs to some association which will speak for him has some outlet for his distress and his sense of resentment. I think he would be astonished at the number of elderly ladies who are living not only in this city but in other towns in Ireland, who had kept up a certain appearance, who had nice curtains on the window, who had kept the hall door painted and who wore a hat going to Mass on Sunday, and if you went behind the curtains in the past, you would find a neat comfortable home, a home which is getting more and more bleak as the value of money changes.

Is it possible, is it administratively and fiscally possible, to do something to ease the burden of income tax on this category of people? I admit the Minister will say: "You know that really they have personal allowances and there are certain allowances they can claim and they cannot be all that poor." That is perfectly true. The argument we are now making is not for the destitute. We do not want to make the case that we are speaking on behalf of those whose circumstances entitle them to receive a non-contributory old age pension at the maximum level. We are talking about people who live in modest, comfortable rooms. I do not think it just arbitrarily to see them reduced in their standard of living to a level which is barely above that of subsistence. They are entitled to their personal pride, to their sense of independence, to their sense of security.

Now the Minister is in circumstances at present in which he says: "There is not much I can do about the situation; there is not much I can do about the depreciation of capital, and about the cost of living. I am at present pressed by great forces that are swirling around me and I confess that the value of their incomes, not to speak of capital, has declined as a result of the decline in the value of money." I confess we were all jointly responsible in advising them to put their money into National Loans at 3¾ and 4 per cent. The Minister may say: "I would like to help them if I could but, if I made any attempt to relieve their situation, the cost to the Exchequer would make the addition to the standard rate ineffective for the purpose for which it is required." I wonder is that true? Has he had time to examine that question and consider whether fixed income by way of investment income or by way of pension could be relieved, what it would cost, and whether it would be practicable to do so? If it is, I suggest to the Minister that Deputy Fitzpatrick's proposal is entitled to a very high priority if he is in a position to make any concession at all.

Mr. O'Leary

Deputy Corish has cleared up the fact that our anxiety is to see that income tax is generally applicable and does not appear to be unbalanced in being levied on one section of the community to the exclusion of another section. It would be a very unfair taxation system which would give that impression to the citizens of the country. Deputy Corish also pointed out that we believe that while the majority of the farmers may in fact be up against pretty hard economic facts, there is a sizeable section of the farming community in pretty comfortable circumstances and our taxation code appears to approve this situation.

The Deputy should not bring Deputy Corry on him.

Mr. O'Leary

There is no danger of our Party being described as a Party who would exploit the situation at present existing, or the dissension that exists between people living in the country and in the city, or fan any rivalry between them. The majority of our Party still come from the rural areas and we are very conscious of the problems of the people living in the rural areas. At the same time, it is time we came down to the facts of life and brought within our taxation net any farmers who are wealthy enough to contribute their part to the country's economy by way of taxation.

We cannot expect taxation in the future as in the past to come exclusively from the working and salaried portion of the population. Since our working force is declining, our industrial working force is increasingly bearing the major portion of increased taxation. In my opinion we have reached saturation point in looking for more taxation from that section. I was talking to a man in my own constituency about the £1 increase. The taxation on that will be roughly 6/-. People have waxed hysterical about the state of the economy not being able to stand this increase of £1, but when tax is taken from it, we are left with the sorry remainder that some people had to go on strike this year to gain.

If we are to get the co-operation of the working population on the industrial side, we must show them that justice is also being done in regard to the other sections. Deputy Gallagher raised some interesting points about taxation liability, and take-over bids, and so on. Deputy Gallagher spoke as a farsighted intelligent business man— and they are becoming very numerous in the Fianna Fáil Party. I speak as one more concerned with the employment figures in these industries. I wonder if Deputy Gallagher considered the situation of the work force in these factories with rationalisation and take-over bids. The Deputy Gallaghers would have us believe that these companies are solely interested in the many messages from various Ministers to rationalise, and that they are acting solely according to the dictates of the Second Programme for Economic Expansion. I do not say that “profit” is a dirty word, but there is a sweet smell of profit when employers come together to rationalise and merge. Many of these mergers take place not with a view to rationalisation but in anticipation of a future trading pattern in which quite sweet retirement gratuities can be paid to private enterprise that is now selling out to foreign enterprise.

When we talk about income tax, we cannot escape talking about the alarming increase in indirect taxation. If we must have an increase in taxation, our Party think it should bear as equitably as possible on all people, and in strict justice, it should bear most heavily on those who can best afford to pay it. If a man by his enterprise, working with Irish material, makes quite an amount of money, the State should extract more from him than from the man who has less money. At the moment that is not happening to a sufficient degree.

Deputy Dillon talks about cigarettes and says quite rightly—and many other Deputies could echo the sentiment— that it would not affect him in what way that increase in indirect taxation would fall. That is quite true. We must try to get increased revenue from taxation that will bear heaviest on those who can afford that increased taxation. At the moment a very high proportion of our taxation comes from those indirect sources, from articles everyone is forced to buy. I will not bring up another bad shadow now, but the turnover tax increased this tendency to extract more money from the things people need most. The vast majority of the population must buy some of the articles which come under the turnover tax net. In like manner they cannot escape some of the other things that come under indirect taxation. That is why our Party would be for direct taxation to be levied on sources that can most easily pay it.

I should like to see some allowances increased such as allowances for school going children. They are not one of the more favoured sections. There are many families who cannot afford to send their children to secondary schools. What type of taxation relief is there in this measure for that type of family? Have we in mind in appraising the position of those school-going children, solely families with the type of income which most Deputies have? Are we not being very parochial and closing our eyes probably to the major proportion of families in this country who cannot get benefit from this kind of relief? I got the impression, when the Minister was presenting this type of allowance, that many of us forgot that this would not apply to that number of families in this country. That type of taxation allowance could be made far more effective if it was brought in for incomes for people who for the moment have their backs against the wall.

This Finance Bill does not clear up this matter and does not clear up the tremendous air of discontent which is in the country at the moment. This afternoon I spoke to some of the people living in my constituency. Those people would not have any fantastic political theories. The only thing they would wish for in the future is that they would have some relief with regard to the cost of living and also some relief with regard to income tax. Most of those people felt that if this country continues in the way it is then it will go down the drain in a very rapid fashion. If this feeling becomes general throughout the country our work in this House will become irrelevant. Our taxation problem needs to be drastically overhauled. If the Minister is serious about overhauling it he should consult with all Deputies in this House who come up against many of those problems.

I should just like to say a few words in favour of increased earned income relief or personal allowance for the lowest paid workers in this country—the farm workers. It is altogether wrong that a single man working on a farm should have to begin paying income tax when he is earning £6 a week. This has been the position now for many years and there has been no change at all in it. Here you have a section of the community who are compelled to work longer hours than any other section of the community. They have to work in all sorts of weather. This poses a special problem where farm workers are asked to go in and work on Sunday to milk cows. This job must be done. In fact, one has almost to compel them to undertake this overtime or extra work.

I have run up against this problem of getting men to do this work. I can see their point of view. You bring in two men to do this extra work on Sunday. One is a single man and the other is a married man. Since PAYE came into operation it has become very obvious that the single men do not want to do this extra work. The figure for the job is a set figure. The married man gets that sum of money entirely into his hands. The single man gets 9s or 10s less. He will ask: "Why should I do this objectionable work on Sunday to earn 9s or 10s for the Revenue Commissioners?" As a result of this those men refuse to do the job. There is a great case for raising this £6 to something a good deal higher, say, £8 or £9 before income tax operates at all. In the case of workers who are compelled to do overtime—because of the nature of their job this overtime must be done—there should be some special consideration given for that category of people.

There is another case which we have made from this side of the House on many occasions and that is the case of the family who are unfortunate enough to have a mentally retarded child and this child has to be paid for in an institution. This child may have the normal expectancy of life. This is a very great burden that must be borne by families during their lifetime. There are other classes of sickness and illness which are entirely paid for by the State. This is not one of them. This is an exceptional case and an unfortunate one. Surely it is not too much to expect that there should be some sort of relief for the unfortunate man who has such a child?

We have put in amendments during the past two or three years asking that this relief would be granted. I got the impression last year that the Minister was inclined to meet this exceptional case. He said he could not do it then but he would consider it again. I hope, since the Minister has got considerable time now to have regard to the burden this places on families, he will see his way, on this occasion, to do something for this unfortunate type of family.

I have a few remarks to make on this matter. We must remember that any relief given must be given at the expense of someone else, just as any increase in wages or salaries must also be given at the expense of someone else. When I heard Deputies talking about farmers' taxation, I had to laugh because when you boil those matters down, you come to the fact that the ordinary tillage farmers 12 months ago had to go on strike—they went on strike last November 12 months—on account of the refusal of a State subsidised body to pay them a definite £7 16s a week for their labour on a 50 hour week. The reason for it was that the Government were not prepared to put what would be considered by some Labour gentlemen as an extra burden on them, that is, an extra penny per pound on the sugar. Therefore, these people had to accept £7 16s for their labour. I do not know what income tax Deputy O'Leary would put on that.

Today 3d per pound has been put on butter because the dairy farmers had to come up here and demonstrate against their conditions.

Mr. O'Leary

The Deputy passed the pickets.

I saw many of you trot into the Lobby against that increase. You are safe now. Your pint escaped today. I consider that any salary of over £1,200 should not have any increase. There should be a definite halt put on that type of salary until those lower sections of the community are brought up to something like a living wage. I am sure even Deputy O'Leary will admit that £7 16s a week for an agricultural worker is not adequate.

Mr. O'Leary

I never said a word.

We are getting away from section 1.

We have been getting away from it all night and I do not wish to show disrespect to the Chair.

I am dealing with the proposal that income tax should be paid by a man earning £7 16s a week. I am not out of order when I attempt to deal with the general position, in this respect, of agriculture, of agricultural workers and the agricultural community in general, most of them living on £220 a year income. There are anomalies in the income tax code that need to be remedied. Two years ago I gave an instance, and I do not think it has been remedied since. It was the case of a farmer, an old bachelor, as many of them are. He and two sisters brought in a nephew and gave him the farm, holding two rooms for themselves in the house. In due course the nephew got married and reared a family of six. When the last of the three old people died, though transfer charges were paid when the holding was handed over to the nephew, the Revenue Commissioners came in and demanded death duties on the whole lot. When I raised that matter here, the then Minister for Finance promised it would be remedied. I do not believe it has been. These are things I should like to see the Minister deal with. I must admit I have not found any cases since.

That proves it has been remedied.

I hope it has. I should like the Minister to tell me openly that it has.

It was remedied in 1961.

That is one good job I did.

I think it was since then that the Deputy raised it.

Unfortunately, there are these anomalies. We all know what the general position is in regard to agriculture. It has been happening for generations. The eldest son gets the farm and the rest work more or less as unpaid labourers. That kept the price of food low in this country until people got so civilised that they would not eat spuds and cabbage any more. Now they want the imported stuff. When the eldest son reached the age of 45, the old lad said: "We will get the young fellow married". There were a couple more sons and daughters in the home and the whole lot came down on the eldest son. When the old man died, if it were within five years of the handing over of the farm, the death duty gentlemen came in and charged tax, though the son had paid the transfer charges on the holding. These things are unjust on the ordinary farmer and the Minister should deal with them.

I rise to support Deputies who have pointed to the total inadequacy of the allowances for income tax in operation today. Despite the colossal increase in the cost of living in recent years, it is a matter of dismay and wonder to the working classes that more adequate allowances have not been conceded. If the Minister cannot be prevailed on to see the moral justice of this matter, surely the economic circumstances with which we have to contend, the hard facts, are sufficient justification for giving to the working classes of the country a better deal under the PAYE system?

The burden of income tax on the ordinary working classes is becoming such an imposition that it is now recognised very largely as a disincentive. Production is suffering as a result of the inadequacy of these allowances. Imagine a worker being obliged to pay income tax on £6 a week. I know it to be a fact that the lowest-paid workers in this country, farmworkers, road-workers, forestry workers, all men who happen to be single particularly, are obliged to pay income tax out of a meagre wage of £8 to £9 per week. There are no allowances in respect of the provision of domestic help, for instance.

There are cases to my knowledge where men live alone who have to travel long distances, put in an arduous day's work in the forests, on the roads or on the farms and who must engage domestic help to cook and wash. Yet our income tax code does not provide any allowance for such a situation, unless the care of children is involved. We know how extremely difficult it can be to get a dependent relative allowance in respect of the maintenance of an invalid unless one can get appropriate medical certificates.

By and large, common justice demands that income tax reliefs under PAYE be increased out of all proportion. PAYE is a good system inas-much as it revealed clearly to working class people how they stood. It got rid of a system under which they were assessed at the end of the year for sizeable amounts and there was always deep anxiety at the end of the period and grave hardship sometimes in the matter of meeting the income tax demands. It was a good thing that the worker should know from week to week what he was liable for but, having made him liable for a certain amount in the £ and a certain amount per dependent relative a number of years ago, surely—in equity, in justice and in fairness—those allowances should be reviewed in accordance with the rise in the cost of living?

I do want to bring it home to the Minister that it is becoming a colossal disincentive to the lowly-paid workers in particular. Mind you, with many of them, the most productive of our people in employment in this country —industrial workers, farm workers, forestry workers and the like—it is reaching a stage when they now feel they do not wish to do overtime. They have no anxiety to work harder, especially in those jobs where task work is involved. It is desirable, if one is to get the best out of any employee, that there should be an incentive. Most of our employers and our State bodies do have incentives of a bonus of some kind or another for task work to be performed, for which some extra moneys are earned. It is now becoming quite patent to those of us who are close to the working classes and the trade union movement that the incentive to work that bit harder is going because of the inadequacy of the income tax concessions and the unwillingness of workers to give large slices of these additional earnings to the Revenue Commissioners. This is a matter to which the Minister must have regard.

When workers become unemployed, it is extremely difficult to get a refund from the income tax authorities. One must be unemployed for quite a considerable length of time and there is a lot of red tape and documentary signing involved before one gets a rebate of any kind. The Minister should devise a speedier method of repayment in this regard.

Many of the things I want to say on this Budget I propose to leave to the General Resolution but I want to join with all those who have spoken here this evening and appealed for a better deal for our people in relation to income tax. The Labour Party has made known its views on this subject in recent years, and particularly in recent months. We did take steps by way of a positive motion in this House prior to the first Budget of this year. It did not reach deliberation stage in this House but it was designed to try to extract from the Minister some concessions in this Budget for all those of us who pay income tax. We subscribed to all these various amendments which brought additional reliefs: for the provision of medicines, for the maintenance of sick persons in the household and for the provision of domestic help. I appreciate that we are seeking these reliefs at a time when the Government find themselves in a great dilemma. We have an economic and financial recession and perhaps it is a bit too much to expect reliefs of this kind at the present time.

The first Budget of this year was one in which everything was taken and nothing given to our people. It was a "grasp-all" Budget. I can well understand the predicament in which this Government find themselves in grasping for money, irrespective of the hardship it imposes on the categories of people concerned. It is an indiscriminate grasp for £sd, left, right and centre. There is no element of social justice or Christianity involved in this Budget. The only concession was a very meagre one to social welfare beneficiaries——

I hope the Deputy will keep to the income tax code which we are discussing.

——and nothing whatsoever for any other category of persons. This is then, perhaps, an appeal which will fall upon deaf ears: an appeal for a better deal in respect of income tax. As far as this Party are concerned, I would not wish this House or the country to think that we were taking sides in respect of this issue on income tax in respect of the different classes in our society, be they workers, employers or farmers, but we do stand on the fundamental principle that, in respect of the imposition of tax of any kind, it should be seen to be fair, just and impartial and that it should fall on the shoulders and backs of those best able to bear it and, particularly, that justice in this matter should be seen clearly to be done.

My plea is in respect of the ordinary working classes who are virtually scourged by income tax at the present time. The Minister, in strict justice, must review this position and must consider better dependants' allowances in conformity with rising costs and the depreciation in the value of money. He must see to it that those people who are dependent on a fixed income—who have been adverted to this evening by many spokesmen—should also get reliefs. This is nothing less than plain justice. I sincerely hope, despite the plight which the country is in at the present time, that something will be done in this regard.

If the Minister wants to rejuvenate the working classes and gear them to the productivity we all desire, if he wants to accelerate industrial and agricultural growth in our community, the best thing he can do is to make it clear to the working classes that he is being fair with them in respect of their real earnings and does not extract from them an unfair amount in direct taxation of this kind. God knows, with the imposition of the turnover tax, the five per cent addition which we have had today and the extremely high cost of living, there is a good and compelling case to be made for further income tax reliefs.

Lastly, if the Minister will have regard to the reports of the committees which sat on this subject, he will realise it was intended that, in accordance with the rise in the cost of living and the fall in the value of money, the allowances which have been untouched for so many years should be increased proportionately. Perhaps the Minister will be able to give us some glimmer of hope that this flagrant injustice in respect of the ordinary working class people of our country, in our income tax code, will be rectified at the earliest opportunity.

Is the Minister going to speak? If he is going to report progress, I shall speak, but if he is going to allow the section to be put I shall not.

There is not much I could say in the time allowed.

Does the Minister not want to say something?

I am getting an opportunity of getting a section through, a section comprising 12 lines in a 1,500 line Bill. We have been at it all day.

Question put.
The Committee divided: Tá, 66; Níl, 51.

  • Aiken, Frank.
  • Allen, Lorcan.
  • Andrews, David.
  • Blaney, Neil T.
  • Boland, Kevin.
  • Booth, Lionel.
  • Boylan, Terence.
  • Brady, Philip.
  • Brennan, Joseph.
  • Brennan, Paudge.
  • Breslin, Cormac.
  • Briscoe, Ben.
  • Burke, Patrick J.
  • Calleary, Phelim A.
  • Carty, Michael.
  • Childers, Erskine.
  • Clohessy, Patrick.
  • Colley, George.
  • Collins, James J.
  • Corry, Martin J.
  • Cotter, Edward.
  • Cronin, Jerry.
  • Crowley, Flor.
  • Crowley, Honor M.
  • Cunningham, Liam.
  • Davern, Don.
  • de Valera, Vivion.
  • Dowling, Joe.
  • Egan, Nicholas.
  • Fahey, John.
  • Fanning, John.
  • Faulkner, Pádraig.
  • Fitzpatrick, Thomas J. (Dublin South-Central).
  • Flanagan, Seán.
  • Foley, Desmond.
  • Gallagher, James.
  • Geoghegan, John.
  • Gibbons, Hugh.
  • Gibbons, James M.
  • Gogan, Richard P.
  • Haughey, Charles.
  • Healy, Augustine A.
  • Hillery, Patrick J.
  • Hillard, Michael.
  • Kenneally, William.
  • Kennedy, James J.
  • Kitt, Michael F.
  • Lalor, Patrick J.
  • Lemass, Noel T.
  • Lemass, Seán.
  • Lenihan, Brian.
  • Lenihan, Patrick.
  • Lynch, Celia.
  • Lynch, Jack.
  • McEllistrim, Thomas.
  • Meaney, Tom.
  • Millar, Anthony G.
  • Molloy, Robert.
  • Moore, Seán.
  • Moran, Michael.
  • Nolan, Thomas.
  • Ó Briain, Donnchadh.
  • Ó Ceallaigh, Seán.
  • O'Connor, Timothy.
  • O'Malley, Donogh.
  • Wyse, Pearse.


  • Barrett, Stephen D.
  • Barry, Richard.
  • Belton, Luke.
  • Belton, Paddy.
  • Burke, Joan T.
  • Byrne, Patrick.
  • Casey, Seán.
  • Clinton, Mark A.
  • Cluskey, Frank.
  • Collins, Seán.
  • Connor, Patrick.
  • Coogan, Fintan.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, Declan.
  • Costello, John A.
  • L'Estrange, Gerald.
  • Lindsay, Patrick J.
  • McAuliffe, Patrick.
  • McLaughlin, Joseph.
  • Mullen, Michael.
  • Murphy, Michael P.
  • Murphy, William.
  • O'Donnell, Patrick.
  • O'Donnell, Tom.
  • O'Hara, Thomas.
  • Coughlan, Stephen.
  • Desmond, Eileen.
  • Dillon, James M.
  • Dockrell, Henry P.
  • Dockrell, Maurice E.
  • Donegan, Patrick S.
  • Dunne, Thomas.
  • Esmonde, Sir Anthony C.
  • Fitzpatrick, Thomas J. (Cavan).
  • Flanagan, Oliver J.
  • Harte, Patrick D.
  • Hogan, Patrick (South Tipperary).
  • Hogan O'Higgins, Brigid.
  • Jones, Denis F.
  • Kenny, Henry.
  • Kyne, Thomas A.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F.K.
  • O'Leary, Michael.
  • Reynolds, Patrick J.
  • Ryan, Richie.
  • Spring, Dan.
  • Sweetman, Gerard.
  • Tierney, Patrick.
  • Treacy, Seán.
Tellers: Tá, Deputies Carty and Geoghegan; Níl, Deputies L'Estrange and T. Dunne.
Question declared carried.