V

A LEVY ON CAPITAL

January, 1918

The Objects of the Levy—Its Origin and History—How it would
work in Practice—The Attitude of the Chancellor—The
Effects of the Scheme in discouraging Thrift—Its Fallacies
and Injustices—The Insuperable Obstacles to its Application
—-Its Influence on Production—One of the Tests of a Tax—-
Judged by this Test the Proposed Levy is doomed.

BY some curious mental process the idea of a levy
on capital has come into rapidly increasing promi-
nence in the last few months, and seems to be gaining
popularity in quarters where one would least expect
it. On the other hand, it is naturally arousing
intense opposition, both among those who would be
most closely affected by its imposition, and also
among those who view with grave concern the pos-
sible and probable economic effects of such a system
of dealing with the national debt. I say " dealing
with the national debt " because, as will be clear, as '
a system of raising money for the war the suggestion
of the levy on capital has little or nothing to recom-
mend it. But, as will also be made clear, the pro-
posal has been put forward as a thing to be done
immediately in order to increase the funds in the
hands of the Chancellor of the Exchequer to be spent
on war purposes.