Taxation and capital
Sir: The economy is like a battery of machines into which work is fed at one end to be converted into wealth which is poured out at the other end. This wealth Is all the time being consumed as fast, or nearly as fast, as it is being produced. There is therefore no hoard of wealth Which can be taxed with impunity. The hoard is capital, and consists almost entirely of the land, the machines, the factories, the roads, the railways, etc, etc, which convert labour, when Skilfully directed, into wealth. Taxes on this capital means consuming for current use what ought to be used for future production. They therefore tend to impoverish the community. They also tend to discourage people from saving and providing more machines etc, i.e. capital for the benefit of the future. These are the reasons why taxes on capital are evil, and why they should not be tolerated.
Communists and Socialists should • realise that they can no more do without capital than any one else. The difference Is that in a communist state and nationalised industries, the capital is owned by the state and therefore the state also gets the profits which are spent as the state thinks best, not as the individual. Since we are not ants our wants are constantly changing and can not be foreseen with certainty. That is Why the price mechanism, which automatically balances supply with demand is better than any system controlled by any government, however able or however well meaning.
C. E. Williamson Jones Flint Cottage, Roundstone Lane, Angmering
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