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.