The Taihape Daily Times AND WAIMARINO ADVOCATE. WEDNESDAY, JUNE 23, 1920. TAXATION OF WAR WEALTH.

Taihape Daily Times, Volume XI, Issue 3509, 23 June 1920, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE.

WEDNESDAY, JUNE 23, 1920. TAXATION OF WAR WEALTH.

Wita which is incorporated “The Taihape Post and Waimarino News.”

With a multitude of conflicting statements and opinions in connection with high prices, deflation of credit, exchange rates, to say nothing of the excuses and apologies made fbr widespread industrial, financial and social trouble s that are convulsing about half the world or more, the ordinary student of current history is ho confused as to be quite unable to get any definite understanding of -uy part of the complex problems except that which comes forcefully by daily contact and experience. In comparing the various statements and opinions they are discovered to be of two distinct classes, most of them I strongly favouring freedom from State control of everything. It is wrong, people urge, for the State to tax wealth, or to hamper wealth-mak-ing by so controlling the necessaries of life as will enable people to live. The British Government recently proposed j a tax upon, or as the opponents of the proposal term it. a levy upon war wealth. The war wealth owners were were strong enough to defeat the Government, and now there are even some banks amongst others pouring out volumes of stuff to excuse taxaI tion of war wealth being discarded as i a mistake-. The best argument yet to j notice is contained in Lloyds' Bank ; Financial Report It is the only reason given that; seems to be worthy of j notice; it ig like an oasis in the de- I serf, for it stands out as the best that either Government or bank can advance. The report seriously stales "that there are many w'ho consider that at a time when all capital and credit legitimately available are required for the recovery of trade and commerce ativ sudden deflation of credit might have most disastrous consequences./" It will be noticed how cautiously the British Bank has worded the best sentence it can frame in favour of the sacredness of war wealth from special taxation: it states there are many "who consider?' and again, any sudden deflation of credit "might" have disastrous consequences. Yes, they might, but every patriot may well ask, what are the consequences to the Empire likely to be if left to the war wealth owners? One town alone in Britain, and that not one of the largest, claims to have twenty-seven new millionaires as a result of war wealth. Unfortunately for the view the Bank seeks to uphold it has brought in the question of national wealth; it has virtually asked whether the .British Empire is richer

or poorer as a result of the war.. It quotes a statement by a famous fin-ancier-economist showing that on a basis of the pound sterling being worth what it will buy, wealth has increased by £4,000,000,000. But ,it asserts, that estimate is fictitious because the pound sterling is not valued by what it can be exchanged for in commodities, yet it utterly omits to state how the value of the pound sterling is fixed. However, it claims that Government proposals to tax* war wealth failed because of this fallacy. The proposal evolved for putting Britain on a more secure financial footing as regards exchange and other matters, was simple enough. No wealth was taxable whose owner did not possess over £5000; to ascertain the amount, of taxable war wealth a valuation was to be made as at 1914 and another as at 1939 arjd whatever excess was shown at the latter date was to be regarded ■as war wealth. These valuations left neither credits nor liabilities out of consideration, debts of all kinds were deducted from valuations. No demur is made by war wealth owners about the fairness of the system of valuation, but singularly they Contend that the value of the sovereign does not lie in what it will buy. By the Government's method of arriving at the increase of war wealth, it was discovered that there would be £4,000,000,000 taxable. View this discovery without prejudice as any sane person may, can it be reasonably, justly, patriotically, aye, honestly arid honourably claimed that it would be a fallacy, a mistake fraught with disastrous consequences to make the owners of those four thousand millions of pounds contribute something towards lessening the national debt so as to rescue the British Empire from an ignominous exchange rate which made the pound sterling worth only fifteen shillings in some foreign countries. There is not wanting evidence that the social and industrial difficulties with which the State is faced result from an unnatural practice permitted by law of exploitation and gathering into private hands the wealth the State cannot acquire for upholding its laws and the administration of public affairs. With all the .destruction wrought by war the British Empire is richer to,-day than i.t was in 3914, and disruption and upheaval only result because wealth has got into the hands of those who will not use it for the Empire's good. The fallacy of war wealth sacredness carried to its legitimate extreme would make the millionaire class rulers of the whole world, simply because they could, according to seemingly admitted rights refuse all other Governments the money they alone could contribute. It is cunningly claimed that most people would, be startled on being told that after live years of devastating war the community was richer, but it is not denied that the community has £4,000,000,000 more than it possessed in 1914. There is no more disheartening aspect of Britsh patriotism to-day than the refusal of that coterie of war wealth owners; of the men who hold the surplus of four thousand million pounds after elimination of those owning up to £SOOO. The State did not hesitate to take the last unit of valuable manhood to carry on the Avar, and yet' it dare not make a levy upon the quixotically piled up riches of men who contributed nothing. Men went to the war torn from their businesses, farms, compelled to sell at a loss, and return to find that they cannot repurchase from war wealth collectors at less than double the price. From this it is readily understood how war wealth has accumulated, it resulted from systematic depreciation of the currency, and when the orgy had reached its highest possible limits systematic depreciation of commodities' took its place. And vet it is contended by the war wealth people in Britain that the value of the pound sterling cannot be computed from its purchasing power. The distressing feature of the whole situation is that if concreted wealth is not compel'.ed to take its just share of taxation there can be no cessation of industrial strife, and in the long run war wealth will sustain the greatest loss from the conditions it is setting up. The producing community are the backbone of any country, it is manifestly dangerous to over-tax that upon which (he State exists, but what do

present taxation proposals amount to? They involve a revaluation of all land and property while boom values obtain, upon wliicli future taxation is lo be levied. Tt is a scheme for the taxation of commodities and that from which commodities come, while producing taxpayers a-e coolly told that war wealth mvsl no! be interfered with ot! the [den that it is needed by its owners for reconstruction of industry; that ; i is :> fallacy |o compute the vajue of the pound sterling by what it will purchase. The owners of the four thousand millions of war wealth look ?t the national debt they have so largely assisted fo put upon the shoulders of the maws of the people, but neither c sense of justice, patriotism or anything humane moves them to let any of the four thousand millions they have accumulated go towards reestablishing a reign of content.