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Is Taxation Less a Crime than Robbery ?

Written by Louis Even on Saturday, 01 February 1958. Posted in Social Credit

Two methods

You try to protect your money and your property when someone attempts to rob you of them. If you are unable to do this yourself you call on the police to help you. When the thief is arrested he is charged, found guilty and punished.

But if the municipality or the government undertakes to seize your money or property, not only have you no recourse to the police to protect you, but you yourself will be found guilty and punished if you refuse to let yourself be preyed upon.

In both cases you are forcibly deprived of what rightfully is yours. But in the first case the spoiler is breaking the law; in the second case he is sanctioned by the law.

"Legalized robbery"

In a conference delivered at Westminster in 1926, Major C. H. Douglas, an engineer and the creator of Social Credit, understandably surprised his audience when he said, after having emphasized that he fully realized the gravity of his statement, that "modern taxation is robbery". (Warning Democracy — p. 61.)

No doubt, many in his audience had the same thought that so many promptly voice when you speak to them of abolishing the taxation system: "But we must have taxes! If there are no taxes where will the government get money?"

Major Douglas knew perfectly well that since there is such a thing as public production, it too has its demands just as private production has. In fact he specifically stated in his book, Warning Democracy, p. 175:

"Taxation in its present form is an unnecessary, inefficient and vexatious method of attaining the ends for which it is ostensibly designed. But while "this is so, there is, of course a sense in which, while private enterprise and public services exist side by side, taxation is inevitable. Public services require a provision both of goods and human service, and the mechanism by which these are transferred from private enterprise to the public service must be in its essence by a form of taxation."

Which is to say that public production should obtain its share of what the country is capable of producing. This is, undeniable.

By what right then do we affirm that modern taxation is legalized robbery? (Note well that we are speaking of modern taxation, of taxation in its present form).

The answer is that modern taxation was conceived of in terms of money instead of in terms of real physical goods. And this misconception makes a world of difference when finance is out of step with reality as is the case today. For this reason, taxes today, modern taxation, that is, cannot be justified.

Productive system and finance system

It is evident that all production, private and public, depends upon the country's productive capacity. In a way, it is a country's ability to produce which should be taxed in order to supply public goods and services. But, instead of the country's productive capacity being taxed, it is the citizens' pocketbooks which are taxed; and these latter show no correspondence at all with productive capacity. They are, at best, merely a reflection of production already accomplished.

It is quite in corformity with reality to designate a part of a country's productive forces for public production. It is not at all in conformity with physical realities to seek to finance new production with money distributed in respect of what has already been produced. This money should logically be applied to buy finished products, not to finance new production thus leaving finished products without any purchasing power to get them moving.

Why deprive the people of the means to acquiring finished products as a condition to proceeding to new production?

To produce goods of all sorts is a function of the productive system, and it performs this function quite satisfactorily.

To finance production is a function of the financial system. Why does it not perform its function with a commensurate efficiency?

Modern money originates in the banking system, and it is far easier for the banker to write and issue money-credits than for the productive system to produce goods.

Production, when not hampered by the barriers erected by finance, can supply at the same time both private and public demands. So why can the financial machinery not finance both private and public production at the same time?

Since the means of paying have their origin in the bank, why not go there to seek the means of financing the new production demanded of our productive system?

If you go to the bank looking for wheat or shoes or sheep, you'll be categorized as mentally unbalanced. You'll be quickly informed that you have come to the wrong place. The bank does not produce these things; it produces money.

Well, isn't it equally silly to go to an apple-grower, who cannot even sell his harvest, and ask him for money with which to finance a new highway?

The brutality of "legalized robbery"

But there exists more than just a mere aberration of justice. There is persistance in this injustice. There are threats of force. There is the infliction of downright brutality.

Who would ever think of threatening a banker with the seizure of his business if he did not supply so many bushels of wheat or so many barrels of apples? And yet the farmer is threatened with the seizure of his farm if, within a certain period, he does not provide so many dollars which he does not possess and has no means of coming by.

Hundreds of families have no other wealth than the houses they possess — if such poor lodgings can be dignified with the name of houses. These are the sum total of their possessions. Now, in the name of our system of taxation, money is demanded of them, money which they do not possess, money which they are not earning and which they simply cannot lay their hands on. And because they cannot supply that which only the bank produces, their house is snatched from them and they are thrown into the street!

Now, if that isn't robbery, what is? And the sheriff sells these poor houses to the rich who don't need them, who have, besides their own houses, a plentiful supply of money. They are sold for a song in order to cover the arrears in taxes. The sheriff becomes the executor of the most skillfully contrived method of robbery ever devised. And he who takes advantage of this execution of robbery in order to enrich himself with the spoils of the poor, becomes an accomplice in robbery. The municipal authorities who thus order the sale of houses become agents of robbers. The higher governments who permit this, who legalize evictions, instead of prosecuting the financial regime, likewise become accomplices in robbery. Yes, modern taxation is robbery. Legalized, but robbery all the same.

Throwing a family into the streets may be called "legal", but it can never be anything but an act of injustice. It is, and always will be, an act of barbarism. It is the violation of the inalienable rights of a family to a roof over its head, of an individual to that share in temporal goods which will enable him to exist decently.

And you, who by your labor, by your savings, or the work of your father, have finally come to own a house in the city, you have property taxes to pay each year, taxes which yearly are becoming progressively heavier. You find that you are forced to pay for your house two or three times over during your life — unless, unable to meet payments, you are obliged to let it fall into the hands of these robbers.

Perhaps you have decided to improve or enlarge your house this year. You give to this project your time, extra labor, a large proportion of your savings. Perhaps you embellish it with a beautiful framework of flowers; or you build flowerbeds where formerly there was only ugliness. You beautify your own little part of the city. And lo! the following year, instead of thanking you, the city raises your taxes! You create a little of true riches and at once the thief passes by your door.

Modern taxation is most certainly robbery.

Public borrowing

Public loans — the loans of today which generate the taxes of tomorrow — are also a form of robbery.

Since taxes do not suffice, public bodies must look to loans for what they call capital production — the production of durable goods which are not for sale, such as aqueducs, roads, schools, hospitals, etc. Such undertakings are well within the limits of the capabilities of the country's production since they are, in fact, produced. But they are beyond financial means since recourse must be had to borrowing, to loans, Again we have this divergence between finance and realities!

These projects are realized by technicians, by the workers of the country, by machines built by the country, with material likewise supplied by the country. Those who work on these projects buy with their salaries the consumer products put on sale in the country, products supplied by the country's productive system or obtained in trade through exportation of the country's goods.

So it is evident that these public works spring, in reality, from the productive system of the country in its entirety. And yet when the works are terminated, the people are declared to be in debt for the total value of these works, plus the interest on the loans which had to be sought from the financiers.

No matter under what particular jurisdiction these works come, municipal, provincial or federal, the end result is that the entire population is collectively indebted for what the population has collectively produced.

Was there ever a swindle on such a gigantic scale? Is this not robbing the people of the fruits of their toil? The people must work twice to pay for the fruit of works already previously accomplished; to pay this money to individuals or institutions which have not contributed so much as one drop of sweat or one morsel of mortar to these works.

Where does this robbery begin? How will a Social Credit regime put an end to this robbery? In a future article we shall discuss the answers to these questions.

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