Why are we taxed ?

This the third part and continuation of the translation of the French, Pourquoi taxer?, written by Louis Even, Director-General of the Union of Electors.

Can we dispense with taxes ?

Is the system of taxation, such as it exists today, really necessary in order that the community may have those public services which it demands of its government?

- Yes, reply the orthodox economists without any hesitation. And what is more, they add, taxes are becoming more and more necessary everyday. Why? Because the people are demanding more and more public works and services; because they are asking more and more of their governments.

- No, answers the Social Credit school. There is another means than that of taxation. And this other means is becoming more necessary, and is imposing itself in spite of all resistance simply because taxation is becoming so heavy that it is threatening to strangle the life out of our economic body.

Taxes, assert Crediters, paralyse rather than help.

They discourage production rather than stimulating it.

They deprive the people of more purchasing power than they distribute to these same people.

They obstruct the normal flow of goods from producer to consumer.

They deprive, without any good reason, private consumption of goods, and this in spite of the fact that the country's production is nowhere near exhausted.

They take away money that has been honestly gained, and they despoil the taxpayer of the fruit of this toil.

They also take away from the individual his right to draw upon the production of his country to his own choice and in keeping with the productive capacity of the country.

The taxation system is finally, one of the worst headaches of modem society, for it absorbs quite uselessly in the final analysis, the time and energies of a multitude of civil servants, while causing the utmost in irritation to those who are being taxed.

One means, but not the only

Taxes are one means of putting resources to work to meet the needs of the people. That much can be admitted. But there are other means which can be thought of and put to work.

For example, the country needs a road. For the road to pass from the planning board to reality, it is necessary to utilize materials and men or machines.

So we see that what is necessary to produce the road is materials and machines and men - the natural resources of the country. Not taxes.

Taxes have never physically built one foot of roads. They have never been anything more than a method to mobilize men, machines and material to build the road.

If there should be another method, less expensive, less troublesome, a method which does hot engender economic hardship, then there is no reason why this other method should not be chosen in preference to taxes. It would be sheer waste to persist in a procedure which requires more time, more effort and which upsets the whole well-balanced system of production.

The school of Social Credit has never hesitated to qualify the method of taxation as being completely obsolete. Perhaps such a method had certain qualified benefits at a time when the capacity to produce was very limited, or at a time when it was believed necessary to have gold in the hand before merchandize could be exchanged. Such a time has passed. The productive capacity of the country awaits only the command to produce, to turn out all that is needed, to fill the needs of individuals, families and public bodies? And we are living in a society where more than 90 percent of business transactions are carried on with no other sign of credit except that which is contained in accounts existing in banks.

A question of adapting finance

Taxes are necessary just so long as society continues to hold to those outworn rules and regulation of the existing financial system which say that they are necessary. But such rules and regulations were not handed down to men along with the Ten Commandments. Men are perfectly free to modify them, to change them or to do away with them completely.

The Social Credit school affirms that we can advantageously do away with the existing tax system without having to forego public works and services, without either inflation or deflation, and at the same time, assuring an adequate and just share of purchasing power to every member of the community. But this can be done only on one condition. Certain modifications must be made in the existing financial system.

What modifications? Modifications which can be summed up in a proposition whose validity: no one-yet has been able-successfully to challenge:

Make finance the exact reflection of realities — make it a mechanism which will obey and serve instead of a monster which dictates and enslaves.

But the existing financial system is not a faithful reflection of economic realities. Our financial system ignores realities, it does violence to them, cripples, contradicts them in every way possible. It comes forth with such absurdities as: "impossible to finance when in fact, there exists a very real possibility to finance. It expresses the wealth of the country in terms of public debt. It makes us work and toil today to pay for wars which are far in the distance past. Finance has become a tyrant instead of the servant which it ought to be.

We can build but can't pay

Taking into consideration only the field of public finance, is it not obvious to anyone who cares to see that day in and day out there is complete discord between physical possibilities and financial possibilities such as they exist?

The community asks for a road, a bridge or a water system. The road, the bridge or the water system are all physically possible. We have, physically, at hand all that we need in order to build these things material, men and machines. We have, also, the clothing, the food, the housing materials, which the workers on such projects will need for themselves personally. But do we go ahead and build such urgently needed projects? Not at all. We wait. These projects are pigeonholed because, according to the rules of our financial system, we can not pay!

The community can build but it can't pay. Physical capacity, financial incapacity.

Is such a finance a real reflection of the real physical facts of our economy?

Physical enrichment, financial debt

What was there in Canada when the first colonists set foot here from old-France? There were no farms, no roads, no buildings, no social organization. Nor were they any debts. The redskins hadn't as yet discovered our financial system.

The centuries have passed – now, look at Canada today. There are farms, villages, cities factories, many wonderful forms of transportation, a multitude of public services, schools, universities, laboratories.

But then see what finance has accomplished: federal debt, provincial debt, debt weighing down the municipalities, debts on the shoulders of other public corporations, debts on private enterprise, debts on the individual.

Physical enrichment, financial indebtedness.

The country which is materially the richest in the world today is the United States of America. It is also the nation which has the largest public debt.

Does finance reflect realities, or does it deform them?

Working for wars of the past

The first world war ended in 1918. The second in 1945. Physically, then, and in terms of reality, these wars are completely over with. But financially they are still continuing.

Just for the second war Canadians are taxed every year 325 million dollars more than before, without this financial slavery in any way diminishing. (This was the amount at the time - Pourquoi, taxer? was written 1953. Ed.). To get the 325 million dollars, Canadian taxpayers had to work. So - it happens that Canadians are working today for a war that was finished in 1945! And they will go on paying for this war just as long as they do not decide to do something about getting rid of this preposterous contradiction of realities.

And the English, no doubt, are still working to pay for the war fought against Napoleon!

Wars are won by sweat, by fatigue, privations, spilth blood, lives sacrificed, widowed wives and orphaned children, sorrow - yes, these are what won two world wars. In reality! But the financial system say that we are indebted to Finance, and each year, we must labour and sweat again in order to pay the tribute which it exacts of us for having won the war.

Is such a finance the mirror of realities?

Sovereign power must beg

The government declares, and frequently repeats, that, the only money it has, or can have, is, that which it gets from those who have it. Even when it wants to bring into being new wealth - such as roads, airports, etc., it must seek for the money where it already exist. If not, then it must do without. Or, as a last resort, make do with new money, which it gets from a private institution, the bank.

Money certainly takes its beginning somewhere. If it does not come into existence through an act of government, no more does it begin with the farmer's seeding machine or the pick and shovel of the miner.

There is more money in Canada today than there was fifteen years ago. Where did it come from? What gave the money in circulation its increase?

If the government is incapable of putting one single new dollar into circulation, it can only mean that someone else is doing so - some agency other than a public organization.

Are we thus to conclude that governments are no longer sovereign in the countries which they presume to govern?

No, they are not sovereign. And those who create true, physical wealth, the farmers, the miners, the lumbermen, the workers in the factories, neither are they sovereign in the land for which they create wealth.

As Mackenzie King expressed it so well, democracy is empty, sovereignty of government or parliament means nothing as long as the control of money is not in the hands of the country, but in the hands of the banks which operate for private interests.

The sovereign government is a beggar. Industrialists and business men are beggars. The nation which labours is a beggar. For they must go begging at the doors of the banks if they wish to live, even though they may be able to produce the things necessary to live.

Tyranny in place of service

We have only money which is rented to us. We have money at the whim of those who have the power of life and death over money. They are the ones who fix the conditions governing the birth, life and death of credit. At the time fixed by them, money must be returned to them, swollen by the interest charges which they set when the money is issued. We are thus obliged to ask them for money to replace that which they have recalled. And the new issue, like the previous, is condemned to the terms of existence which they set, saddled with the same interest charges.

Since money is needed to finance developments, it is not difficult to see how debt can accumulate as the country is developed.

Governments are the foremen over all the other beggars. They tax these beggars in order that the rent on money may be repaid to the true masters of the nation.

A terrifying thought, but true!

The servant has become the master - and what a tyrannical master! Finance is in no way the true reflection of the physical realities of our society. It has become the tyrannical dictator over those who produce real wealth.

Try and get five cents for the unemployed living in misery! But there is no problem at all finding the millions necessary to finance the butchery we call war. And once the guns are silent and production is turned to the things of peace, these masters demand the repayment to them of the billions which were used to slaughter humanity.

There is no difficulty understanding that finance of such a nature can very easily tax the people, setting up a system which holds the people in a sort of slavery, rationing them the things necessary for life while all the while these same people are producing a super abundance of wealth, true wealth.

How different the picture would be under a system which was in conformity with the facts, with reality!

(To be continued)