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Full text of "War-time financial problems"

44 WAR FINANCE AS IT MIGHT HAVE BEEN

of revenue as they went on, whereas in the present
war the proportion that we are paying by taxation,
instead of being 47 per cent., as it was when our
sturdy ancestors fought against Napoleon, is less
than 20 per cent.* Why has this been so ? Partly,
no doubt, owing to the slackness and cowardice of
our politicians, and the apathy of the overworked
officials, who have been too busy with the details of
finance to think the problem out on a large scale.
But it is chiefly, I think, because our system of
taxation, though probably the best in the world,
involves so matoy inequities that it cannot be applied
on a really large scale without producing a discontent
which might have had serious consequences on our
conduct of the war.

It is not possible nowadays, now that the working
classes are conscious of their strength, to apply
taxation to ordinary articles of general consump-
tion with anything like the ruthlessness which in
former days produced such widespread misery. In-
direct taxation of this kind carries with it this
inherent weakness that its burden falls most heavily
on those who are least able to bear it, consequently
it is bound to break in the hand of those who
attempt to apply it with anything like vigour to a
community which is prepared to stand up for fair
treatment. A tax on bread or salt obviously hits
the wage-earner at 305. a week infinitely harder than
it hits the millionaire, and so the country would not
tolerate taxes on bread or salt. Direct taxes, such

* See Economist, August 4, 1917, p, 15;,