High Taxation and Wages A specially interesting and courageous report
on the effect of taxes on prices has been written by a Sub-Committee of the General Federation of Trade Unions. The Committee says that however desirable it may be to secure a fairer distribution of wealth, it is fatal to eat up that capital which is necessary to finance production. Those who apply to the distribution of wealth only " measurement by money " ignore the truth that the value of money depends upon the useful and sellable goods which lie behind it. To increase money artificially is to decrease its value. Thus the wage-earner is badly advised when he is told that all his insurance, pensions, housing, and education can be paid for out of capital without jeopardizing his industrial existence. Really all these things and many others have to be paid for out of the money earned by tie wage-earner himself. A familiar answer by many Trade Unionists to such sound arguments is that high taxation on incomes and estates is an incentive to greater efforts. The Committee regards this argument as dangerous, and remarks that if it were carried to its conclusion all incomes would be taxed out of existence and wages would be reduced • to zero.
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