THE GREAT GODDESS TAXATION. D URING the controversy over Mr. Lloyd
George's first Budget we pointed out the strange cult of taxation which possessed the Liberal Party. Whereas taxation used to be regarded as an evil, even if a necessary evil, the advocates of the now finance seemed to consider it as a positive blessing. People grew positively lyrical over new imposts and new calls upon the purse of the taxpayer. We ventured to doubt whether this adoration of the goddess Taxation would last for very long, and we are glad already to see signs of a return to a saner attitude. Possibly the better mood may not last, but for the moment; at any rate, no one who reads the signs of the times can doubt that there is a slump, and a very heavy slump, in Lloyd Georgeistn. To begin with, the Insurance Act, with its unknown demands on the public purse, is unquestionably exceedingly unpopular. People are beginning to recognize that the so-called insurance payments, whether paid by the workman or the employer, are nothing less than taxes. The insured may get certain benefits, but the fact remains, and no rhetoric can alter it, that an impost of 3d. a week, which can be enforced by the State, just as can any other impost, is a tax, and, what is more, a very unfair tax, since the man with £50 a year will pay at the same rate as the man with three times his income. Next, Mr. Lloyd George's boasted land taxes are seen to be a fraud. We are spending hundreds of thousands of pounds a year on valuation and adminis- tration charges, and the yields of the new taxes are as follows :— a Increment value duty .4 4. 127
Reversion duty ... ... 258 Undeveloped land duty ... 2,361
The mineral rights duty no doubt draws its half-million, but then that is merely a form of double income-tax in respect of certain types of income, and has really nothing to do with the vaunted new philosophy of taxation. Finally Mr. Lloyd George seems to be inspiring almost as much distrust among his friends as among the classes whom he has denounced so often on public platforms. We note, for example, that the New Age, the independent Socialist and ultra-democratic organ, in its issue of last Thursday, deals with Mr. Lloyd George very faithfully indeed :— "Mr. Lloyd George as Prime Minister is a spectacle we desire never to see in this country. As the head of the government of Wales he would servo his own country well, no doubt, and right ; but as the head of the British Empire we can only say that his accession would be a national calamity The corruption associated with the name of this Welsh mosstrooper is no longer commented on by us alone : it is a matter now of common public know- ledge. We do not remember that even in the days of Walpole a leader of the Opposition dared publicly accuse a prominent Minister of bribery. Yet Mr. Bonar Law, in his speech at the Albert Hall on Friday, openly stated that in view of the jobs and honours distributed recently among the Welsh members the most profitable occupation at present was to be a Welsh Radical politician. It is some measure of the morality of Nonconformists that this charge will be ignored, and Mr. Lloyd George will continue to be their saint and heavenly statesman. This corruption of individuals, however, wo have always said would in time infect the whole nation. The sight of fat jobs being distributed to people who have done nothing to deserve them is an example too alluring to the rest of the popula- tion to be missed. All the unprincipled young devils of semi- education are now scrambling round the Government for soft jobs on easy terms. No fewer than 82,000 young men have 'put in 'for one of the three or four thousand paid offices under the new Insur- ance Act. It is one of the most disgusting spectacles any country has ever seen, and may be traced directly and unchallengeably to the initiative of Mr. Lloyd George himself. Nonconformists have indeed come into power when this class of person, for whom no private job would be too degraded, scramble for public offices without a word of censure from their spiritual loaders. The infection of Mr. Lloyd George's corrupt personality has spread even more widely than to the would-be bureaucrats. Ambitious, intensely active, ready-witted, and domineering, he has managed to characterize the Cabinet and to employ its united strength as his tool. Who else in the Cabinet counts by the side of his bizarre personality P" Though there is of course a good deal of exaggeration in all this, it certainly is a remarkable symptom that Mr. Lloyd George should be thus treated by those whom one would naturally expect to find his best friends. No doubt the New Age has a knack of being a little previous in its political criticisms, but we shall not be surprised to find, as has happened before, that what it thinks to-day a very large number of ultra-Radicals will be thinking in six months' time. If we are right in this supposition, the Lloyd George system of finance has failed to do what it was intended to do, that is, to make the country believe that the Liberal Party in general and Mr. Lloyd George in particular aro the best friends of the working man. And here wo must be once more reminiscent. When we pointed out that the worship of the great goddess Taxation was not one that would last very long,' we also ventured to assert that even on the lowest party grounds it would. pay a Chancellor of the Exchequer much better to take off taxation rather than impose it, and that, in spite of appearances to the contrary, the public would always give credit to the man who relieved the burden on the taxpayer rather than he who increased that burden. Consider what Mr. Lloyd George might have done if instead of engaging in new schemes of so- called social reform, which involve huge expenditure, he had stuck to the sound principle that there is no way in which the working man can be more successfully helped and his material position more improved than by re- lieving him of taxation. Let us see what Mr. Lloyd George could have done to help the poorer section of the community if he had relieved them of taxation instead of giving them Socialistic sops. We will cheerfully assume that Mr. Lloyd George would have placed all the extra drawing taxes which he did place upon the rich, for we have never been against the principle that the new needs of the State must be met as far as possible out of taxes imposed, at any rate in the first place, upon the wealthy.
For that reason we did not object to an increase of the ordinary income-tax, to the supertax, or, per se, to the increase of the death duties or the stamp duties. Let us assume, then, that Mr. Lloyd George would in any case have imposed all the taxation on the richer classes which he did impose, including the new licence duties. Let us next assume that lie did not pass the Old-Age Pensions Act with its vast expenditure, now amounting to thirteen millions. Let us assume, also, that Mr. Lloyd George had not proposed to spend the money now allocated to the Development Fund and the Road Fund, a sum of £1,280,000 'a year ; that the House of Commons had not been endowed with a quarter of a. million a year ; and that the increase in. the personnel of the bureaucracy needed for Mr. Lloyd George's wild-cat schemes had not taken place—an increase which, though concealed in various ways, amounts in the aggregate to many millions a year, and is the cause of that appalling rise in the cost of the civil administration of the country that has character- ized the finance of the present Government. Finally, let us assume that Mr. Lloyd George had decided to treat the Sinking Fund as ho has treated it and to reduce as largely as he has reduced the money available for paying off debt —a policy of which we do not approve per se, but which, at any rate, is not open to the charge of causing increased taxation. From these premises, i.e., if Mr. Lloyd George had placed new burdens on the rich as now, had reduced the amounts available for paying off debt exactly as he has reduced them, and had not spent money on old- age pensions and salaries for members of Parliament, nor incurred those increases in the civil expenditure which were required by the Lloyd Georgian finance, it would have been possible for him to reduce taxation by at least seventeen millions a year. If he had left the civil expenditure where be found it when he came in, be could have reduced taxation by twenty or twenty-two millions, but we are content to take the lower figure. , Now think for a moment what he might have done to help the working man and to increase the scanty stores of the poor by relief of taxation on this scale. He might have taken off the whole of the sugar duty, which now amounts, roughly, to three millions a year. He might have halved the tea duty, which would have cost him another three millions, making six millions in all. He might then have halved the tobacco duties, which would have cost him, say, eight millions, and abolished for good and all the duties on chicory, cocoa, coffee, currants, raisins, and dried fruits, which would have cost him in all about another million. He would then have used up £15,000,000 and have had two millions more to give away. This he might have employed. most usefully in relief of the rates on the houses of the poor throughout the United Kingdom—a relief of taxation which would have done something to help on the solution of the housing problem. We venture to say that if Mr. Lloyd George had done this he would have conferred infinitely greater benefits upon the State than he has yet conferred. The seventeen millions which instead of being extracted by the State would have been left, in the old- fashioned but perfectly sound phrase, to fructify in the pockets of the people would have indeed borne "rare and refreshing fruit." These seventeen millions touched by the dead hand of the State become cold and lifeless. Laid up in the napkin of the bureaucracy they produce little or no fruit. Left to the people themselves they would bear some ten, some twenty, some a hundredfold of profit. Again, as experience as well as theory has proved a thousand times over, reduction of taxation never results in the full loss of revenue anticipated. We can say with absolute certainty that if he had halved the tea duties Mr. Lloyd George would not in reality have lost half the revenue. The tea consumption would instantly have responded, and in all probability in six or seven years the halved duties would be bringing into the Treasury almost as much as the ordinary duties now yield. That would certainly be the case with the tobacco duties, where consumption responds to a reduction in price with a special promptness. What a Chancellor of the Exchequer wants for his work to prosper is a rich and prosperous country But the way to make countries rich and prosperous is to tax them little. Therefore, paradoxical as it may seem, the revenue in future years would actually have benefited by the course of action we are considering. Remember that we must not be held to say that the specific proposals we have made would have been in any absolute sense the wisest that could have been adopted. In all probability a reduction of the Income-Tax if not of the Death Duties ought to have been suggested, and, in our opinion, the Sinking Fund ought not to be raided in order to bring about reduced taxation. What we want to urge at the moment is that even from the point of view of Radical and ultra-democratic finance it would have paid Mr. Lloyd George far better to reduce taxation in the magnificent and even sensational manner in which he could have reduced it than to heap fresh burdens ou the rich and maintain vast taxation on the poor in order to carry out the doubtful benefits of so-called Liberal social reform. Though politicians do not think so, we are convinced that the people at large would be immensely grateful for a relief of taxation. They have come to look upon the growth of taxation as in- evitable and all protest useless. We are certain, however, that the first statesman who instead of filling his appeals to the electors with talk about new tariffs or new taxes will hold out to them the hope of decreasing taxation, even though at the same time he makes full and complete provision for national defence —the two things are not incompatible—will gain the gratitude of the democracy, and, what is more, will have truly served his country. We desire as ardently as any Socialist that the condition of the poor shall be improved and that the workers shall obtain a larger share of profits. The way to do that, however, is to make the country more prosperous, and one of the quickest and most efficient ways of making it more prosperous is to tax it less heavily. That is a conclusion which, of course, the Socialists and the Lloyd-Georgians will greet with derision, but nevertheless it is true, and we trust that our words may find some response even in the breast of the ordinary Liberal—
May bid the ancient torrent moan, Although its very source be dry.
After all, it was not so many years ago that all that we have been saying in this article were the commonplaces of Liberal finance—the gospel which Mr. Gladstone preached every time he opened the National Budget.
Previous page
