50 Years Ago: The Capital Levy
In the “FORWARD” (Saturday, May 5th, 1923), Mr. F. W. Pethick Lawrence, a Labour candidate and prominent advocate, sets out what he calls “The Case for the Capital Levy,” with the sub-title, “Lift the Burden of Debt from Industry and Labour.”
If the burden rested on the backs of the workers it might be worth while trying to throw it off. But if the workers have no surplus, then they cannot be robbed of what they don’t possess; and, in spite of apparent objections, the workers as a whole do not suffer from high, nor benefit from low taxation. They suffer because they are robbed, and they are robbed whether taxes are high or low, and the degree of the robbery has, over a period, no direct or indirect relation to taxation. As we have seen, the workers receive all the wealth they possess from the capitalist owners, and, further, these owners control at present the machinery by means of which taxes are levied.
Now, the workers either receive a surplus over their minimum needs or they do not. If they don’t, then they cannot be robbed of that non-existent surplus afterwards. If they do, then the capitalists will have given the surplus either because they are philanthropists or because they are compelled by economic forces. If they are philanthropists, then they will not take back the gift they gave; and if they were compelled to give, then the same forces will prevent them from taking it back.
The pertinent question Lawrence might answer is this : Would the capitalists, if there were no taxation at all, give the workers a larger share of the wealth produced, and, if so, why?
Mr. Lawrence says : “The main principle of the levy is simplicity itself. It is to pay off debt out of wealth. The wealth of the country as a whole is the wealth of its citizens.” This, as I have already explained, is quite untrue. The wealth of the country as a whole is the private property of the capitalist class. Only the owners of property can suffer the burden of taxation, and only the owners do suffer. Some of them want you, the propertyless workers, to pull their chestnuts out of the fire, and Mr. Lawrence and the Labour Party are making a bid for office on the strength of offering to do the necessary publicity work.
While the capitalists will on the one hand be relieved from the burden of paying the debt interest, they will also, on the other hand, be deprived of the present means of paying that interest. Some will gain by reduced taxation what others lose by the paying off by the State of their quota of the debt and their consequent loss of interest on their bonds. The money paid out will, in its turn, be reinvested in industry, and we shall be as we were.
(From an article by E. Hardy in the SOCIALIST STANDARD for August 1923)