The engineer-economist, C. H. Douglas, author of the Social Credit proposals, wrote: "Modern taxation is legalized robbery". To, what extent is this true?
To hinder or to prevent a people from obtaining what they have produced, is certainly to rob them of their just fruits. In the same manner, to put a people in debt for what they have themselves produced, is also to rob them.
Take the case of a collectivity which in a given period produces 30,000 tons of food. If the financial rules or system enables the population to obtain only 18,000 tons of food products, then that collectivity has been robbed of 12,000 tons — the fruit of its labour.
Or, if this people construct 10 miles of road, but they are put into debt for 5 miles of it, then they have surely been robbed... robbed of half of their public production. And if, consequently, this people are taxed from year to year and made to pay twice and three times the value of the road that it constructed itself, then this people are scandalously robbed — twice and three times the financial cost of their work and materials.
The Province of Manitoba, after World War I, built her present parliament buildings. In 1938, the Hon. Stuart Garson (former Premier of Manitoba, and now Federal Minister of Justice) admitted that:
The parliament buildings originally cost:.......... $9,400,000
Manitoba had already paid on them................. $9,600,000
But still owed on them...................................... $8,6000,000
The people of Manitoba had already paid for their buildings once, and started paying for them a second time, financially. But still owed nearly as much as their original cost!
The WINNIPEG TRIBUNE estimated that, at the past rate of repayment, it would take about another 500 years to pay for them. Imagine 500 years of interest charges Imagine the final cost!
The Montreal Harbour Commission, in 1929, built a bridge across the St. Lawrence River at a cost of $19,000,000. It was financed by the sale of government bonds bearing 5 percent interest, and maturing in 1969. The interest amounts to $950,000 annually and, by 1969, the interest alone on this bridge will have cost the people $38,000,000 twice the original cost of the bridge — and the bonds will still be unredeemed.
Under present financial methods, based on debt and taxation, there simply is no relationship between real costs (labour and material consumed in the construction) and financial costs. The people who do not turn a shoveful of sod or contribute one pound of material collect twice or three times as much as the people who supply the material and do the work!
Canadians paid the real cost of their part in Wolrd War II, in the labour, material and blood that went into our winning effort. But, financially, we still owe billions on it. And we shall be taxed over and over again for decades to come (unless the rules are changed), paying interest to the financial institutions which created and loaned to Canada her own credit (backed by the wealth of this nation).
Instead of monetizing our own real wealth, our government allowed the private banking institutions to monetize it, loan us our own financial credit (it must have been ours as the security behind the creation of credit was the wealth of Canada), and charge us compound interest on that which was ours in the first place.
If this process does not constitute legalized robbery, then words have no meaning.
The damage done by taxes to the healthy functioning of economic life is well known. It is so apparent that public bodies resort to borrowing when they judge it impossible to tax more heavily without killing the production system. But the loans are only taxes deferred, whose total amount will be doubled or tripled through interest charges.
In Montreal, after passing along about 20 million dollars annually out of about 112 millions in tax receipts, the city has at its disposal over 90 millions. Out of this, a slice of 18 millions is handed over, without discussion, to 'service' the public debt. This huge expenditure brings absolutely nothing to the city — not so much as a square inch of sidewalk. As far as the purchasing power of the people of Montreal is concerned, this is a loss or a theft, pure and simple. So, also, is a portion of the 20 millions given to the School Commission, which travels the same 'service' route.
La Pointe aux Trembles is another example. Examining the financial statement of this Quebec town, with the budgetary estimates for 1955, what do we find?
We find that the total revenue from taxes, licences, permits, etc., is estimated at $369,804.31. And out of this amount collected from the population in taxes, the town will pay in debt charges alone the sum of $273,315.90 — that is, 74 percent of its total revenue!
In other words, out of every $100 that it collects from its people, the town must pay $74 to its creditors, and keeps only $26 for its administration and municipal services.
After the town pays $273,315 to the financiers, it will have left only $96,489 to render public service to the people who pay the taxes. But it requires annually for its services a sum of $234,535. Where is it to get this money to pay for its public services? It has indeed collected $369,804 ($135,269 more than actual requirements). But already the financial system has swallowed up three quarters of it, and there remains only $96,489. So the budget shows a deficit of $138,046.
Although La Pointe aux Trembles collects in taxes over 57 percent more than is required for public services (works, police, etc.), after paying tribute on her debt she has left only 41 percent of the sum required for these public services.
To meet the deficit, under the present debt finance system, the town has the two alternatives: (1) raise taxes still higher; or, (2) borrow, thereby further increasing the public debt, which in turn will mean still more interest and taxes next year and in the years ahead.
Who built Canada — the farms, the towns, the roads, the factories? Primarily, Canadians.
Now add up the debt of Canada — the federal, provincial, municipal and other debts. What do we find? We find that the builders of this country are up to their neck in financial debt to the financial system which builds nothing, but, unchecked, steals everything.
Any practise which takes away from an individual or community that which it has produced, without returning the equivalent, is surely nothing short of robbery. Sanctioned by government, yes. But still ‘legalized robbery'.
The sanction of the state may bring to the financiers official respect and honour, rather than a term in jail. But theft, even when sanctioned or legalized, is still a crime against Man and God.
Examine the examples we have cited, and those in your own community and province; and then evaluate for yourself the truth of C. H. Douglas' statement that: "Modern taxation is legalized robbery".
Another rank injustice of the present property tax is the practise of penalizing all improvement by increasing the tax.
One man allows his home to become run-down, and throws away his spare dollars catering to destructive appetites. Another man, a more constructive type of citizen, uses his spare dollars to purchase tools and building materials, and to add to and improve and beautify his home and grounds. There can be no question as to who adds most to his community. And yet, under the present system of taxation, the second man will be immediately penalized and punished for his initiative in improving his home and enriching his community. His taxes will be raised and he will be penalized each year in the future.
Thus does the present tax system favour poor citizenship and disregard for family and community, and punish the use of creative skills and initiative in providing for the family and enriching the community.
Is this other than "legalized robbery"?
But, you say, we must pay for our public services. Indeed we must.
C. H. Douglas, on this subject, writes:
"It is well understood that taxation in its present form is an unnecessary, inefficient and vexatious method of attaining the needs for which it is ostensibly designed. But while this is so, there is of course a sense in which, while private enteņprise 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 in its essence be by a form of taxation.
"Now there are just two methods in theory by which the unearned increment of association which we call public credit can be distributed, these two methods being either a grant of'money'or a general reduction of prices, and the choice between these two methods is one of practicability and not of principle. So there are two methods by which this transfer of goods and services from private to public use can be obtained, the direct and the indirect method, and it is curious that we have such a tendency to insist on the direct method, with its crudities, complications and inequalities. It would be both simple and practical to abolish every tax in Britain, substituting therefor a simple sales tax on every description of article, and, apart from other considerations, such a policy would result in an economy of administration, for in excess of anything conceivable, within the limits of the existing financial system." (Warning Democracy, pp. 175-6)
Addressing the Women's Engineering Society in London on January 19, 1938, C. H. Douglas drew attention to the tremendous waste of time and labour in non-productive paper work today, adding:
"The same remarks apply to the immensely complex, irritating and time-wasting taxation system, which keeps hundreds of people busily working, and in a complete waste of time. The whole of the results which are supposed to be achieved by the system of taxation could be achieved without any book-keeping at all; they could be achieved entirely through the price system."
Social Credit would take from the present financial monopoly, and restore to the people, control of financial policy.
Money would be pumped into circulation at the same rate of flow as goods and services moved onto the market. Consumption would be brought up to the level of production. The community which produces the wealth, the real credit, would no longer have to pay usurious interest and go into endless debt to have the use of its financial credit, which is in reality only a reflection, or book-keeping equivalent, of its real credit.
Under Social Credit, production would not be restricted to fit an inadequate purchasing power. What is physically possible would become financially possible, without debt and oppressive taxation. The only limit to our living standards would be our vast resources and productive machine.
All desired, and physically possible, consumer production, and public services, would be within the financial means of the people. And any taxation necessary would be greatly simplified and only used to keep the healthy balance between consumption and full production. Our people would be prosperous, free and independent.
Does Canada need Social Credit? The present scandalous system of finance and taxation itself suggests the answer.