The Gazette 1967/71

evasion depended on applying penalties commen surate with the seriousness of the offence. All wage and salary earners were now effectively subject to pay-as-you-earn, but gains and profits arising from farming, whatever their size or nature and even if associated with other income, were exempted from income tax. There was a feeling that tax was avoided or too easily evaded on incomes arising from self-employment in other sectors. Tax structure The N.I.E.C. believed that the question of the whole tax structure and its incidence on different categories would have to be studied in depth. An important section of the report was devoted to farmers' incomes. It said that where the transfer of purchasing power to the agricultural sector was effected through price increases, whether increases in the market prices or in administered prices, it could be achieved only if it was accepted by the non-agricultural sector, and not used to support demands for higher incomes; if it was not so accepted, the higher food prices might be used to support demands for wage and price increases outside agriculture. Wage and price increases in such circumstances would raise farmers' costs, so that the attempted transfer to agriculture was ineffectual and resulted in further demands from the agricultural sector for an increase in guaranteed prices and add in a new twist in the wage and price spiral. Consequently, a decision covering the current level of support for farmers' incomes would re quire to be taken at the same time as — and be recognised as an integral part of — decisions con cerning developments in non-agricultural money incomes. These decisions would have to be made with respect to farmers' incomes on the average rather than in the aggregate since, with the development of the economy, the numbers engaged When these decisions were being made, due weight would have to be placed on the fact that increases in farmers' income—whatever their size to start with—were now statutorily exempt from income tax. Since there were no representatives of the agricultural sector on the council, the 16 in agriculture would fall. Farmers' exemption

recommended by the N.I.E.C. could help in achieving these desirable objectives. The Govern ment hoped that all concerned would accept the N.I.E.C.'s recommendations and co-operate in making them effective. The council, composed of representatives of the Government, the Federated Union of Employers (a large body which with other employer bodies formed the new Irish Employers' Confederation), other employer organisations, State boards, and the Confederation of Irish Industry, recognised that the success of the policy would depend on its being supported by the public at large. "To be successful an incomes and prices policy must have the support of all sections of the com munity", the report said. One proposal suggested that there should be a pause of up to three months in a pay claim re quiring detailed investigation, one of whose functions would be to state the public interest. While a case was being investigated, the workers involved would be granted increases within the terms of the guide-lines or national agreement. Year's work The 47-page report is the fruit of over a year's work by the general purposes committee of the N.I.E.C. It promises to be the most important and influential of the 29 reports issued by the council since 1964. The report said that it was essential that there should be full information available about per sonal incomes, for example in the professional and business fields, as was already the practice in some countries. One step in this direction would be to extend the present practice relative to the disclosure of the aggregate remuneration of directors in public companies to the vital remuner ation, including fringe benefits, of the top management executives. Dissatisfaction with the behaviour of profes sional earnings, within the context of dissatis faction with income distribution in general, existed in part because of a belief that it was easier for this category of income to evade taxation. Tax evasion was not, of course, limited to professional earnings. While, ideally, it was hoped that more and more citizens would come to regard payment of their full tax as a moral obligation, the N.I.E.C. felt that the effectiveness of measures to end