“The power to tax is the power to destroy."
- This statement was made by an informed Wall Street financier, the late Jacob Schiff, senior partner of Kuhn, Loeb & Co.
Taxation deals with the freedom, the security and the property of the individual, much in the same manner as the two rapacious vultures of our cartoon deal with the poor lamb.
It would seem today as if Governments - federal, provincial, municipal — were considering it as their first and most sacred task to prey upon the income of the individual, the legitimate profit of the corporation, the purse of the shopper, the acquisition of the property owner, the legacy of the deceased.
They have forced employers and merchants into the role of unofficial and unpaid tax-gatherers.
If the Federal and some Provincial governments come to grips, it is simply a fight for the share apportioned to each robber.
Taxation, visible and hidden, is higher than ever, when it should be an antique for museums in our world of technological progress.
A substantial part of the proceeds of taxation does not even go to pay one iota of public service or public development. It goes to individuals who charge the community for the use of money which rightfully belongs to the community. It is called “interests on loans". Loans of what? Loans of figures representing work,skill, material, production, supplied by the commnunity itself, and not by bankers who just write figures in ledgers.
Unless it be sheer and wilful inflation, every single dollar issued and loaned by the banker has, in essence, for collateral the difference between consumption and potential production. This difference is surely an asset of the community. So all issue of financial credit based on that asset should go as dividends to the members of the community, instead of creating somewhere a liability which the community has to pay in prices or in taxes.
The city of Montreal presently collects 90 million dollars annually for municipal purposes; and of this, more than 18 million dollars go in this manner to the controllers of the permits to act. The city further collects 20 million dollars for school purposes, and the two school boards have to take a slice of it to pay for their own borrowings.
The same with taxes going to our provincial government or to our federal government.
Social Credit would not only stop this blatant robbery; but it would abolish the whole machinery of taxation, which does not at: all reflect the facts of our economic situation.
Thinking in terms of reality, Social Credit would consider public services or public works as a levy upon the productive power of the community, not as a levy upon financial incomes which consist of money already created for other production.
The State needs not deprive the individual of his means of placing orders with the producing system. The State and the individual may well place their orders concurrently and be served concurrently. Production is craving for orders.
As for the financial aspects of the operation, they are just a matter of bookkeeping reflecting the facts of production (public or private) and consumption (public or private).
A great economist, a contemporary of Douglas, the late A. R. Orage sums it up concisely as follows:
"A financial system must be made to reflect, and continuously to reflect, the facts of the communal and real economic situation. To this end, it is necessary to establish a National Credit Account with, so to say, parallel columns for Real and Financial Capital, Expenditure (consumption), Income (production), Profit (appreciation of capital) and National Dividend, (profit-sharing). Upon such a National Credit Account, both the State and the individual would be able to draw as partners, and neither at the expense of the other. Taxation of the individual for revenue would be superfluous. At the same time the public services could be generously maintained. State and Individual would be reconciled in the community."
This would be finance according to facts. This would be life instead of destruction. This would be Social Credit.