Letter: The Capital Levy (1923)

Letter to the Editors from the November 1923 issue of the Socialist Standard

To the Editor of the Socialist Standard.

Dear Sir,

With regard to the article on the Capital Levy, I would like you to answer the following questions :—

I agree that all taxes are paid by the rich, and come out of surplus value. The robber pays taxes with the wealth he has robbed. But if taxes go to pay for working-class education, old age pensions, etc., then it is the robbers who are made to pay for services rendered to the workers. So that taxation may be used as a lever by the workers to recover some of the wealth taken from them.

Now again, if the Capital Levy, instead of being used to relieve taxation, is used to pay for more and better social services—then the Capital Levy will help the workers.

It is surer to help the workers than higher wages, because the sliding scale—the fodder basis—neutralises higher wages; while social services cannot be neutralised so easily.

The Capital Levy can be used to pay for the land, and instruments of distribution and exchange socialised. To pay means with the money levied from the whole of the capitalist class—the only class that can be levied.

Thanking you,

Yours, etc.,

R. Nelt.

Reply to Mr. Nelt.

Mr. Nelt sets out to explain how taxation (or a special form of it, the Capital Levy) “may be used as a lever by the workers to recover some of the wealth taken from them.” He is, however, not logical in his argument. He says quite correctly that the capitalist class pay for education, old age pensions, etc. Then, without any explanation, he alters “pay” into “are made to pay.” The latter, if it were true, would support his argument, the former, which is true, does not. The capitalist class levy themselves to pay for social services, and being in control of the political machinery they decide the form and the amount of the taxation, and the objects to which the revenue shall be devoted. While the workers continue their present attitude of indifference and actual opposition to their own interests, the capitalists will have just that amount of freedom they now possess to order their affairs as they choose. They will tax themselves as they like, and spend their money on whatever object seems good to them. If the workers had the will and the power to destroy capitalism it would be silly to waste that power on the minor reforms Mr. Nelt proposes; while both will and power are lacking it is impossible to “make” the capitalists do even these small things.

Let me also remind Mr. Nelt that the primary object of the Levy, as advocated by Mr. Pethick Lawrence and the Labour Party generally, is not to increase, but to lower taxation. “It could not be justified except for the purpose of debt reduction.” (Mr. Snowden, Morning Post, 28th June, 1923.) Perhaps Mr. Nelt may imagine that after the advent of a Labour Government taxes really would be levied with the deliberate intention of plundering the capitalist on behalf of the workers. Mr. Snowden disposes of that also, and at the same time supports our view that the capitalist system will be as strong and as safe after a Labour victory as before.

  “If, of course, the commercial classes and those who would have to contribute to a Capital Levy will not have it, but prefer to go on paying a high income tax without any hope of any substantial reduction, they must bear it, and a Labour Government would have to look in other directions than the Capital Levy for revenue to enable the food taxes to be removed, the income tax on moderate incomes to be reduced and to finance schemes of social reform.”

It is obvious, too, that if capitalist opposition will be able to make the Labour Government give up the Capital Levy, the capitalist will then, as now, dictate their own programme of social reform.

Edgar Hardcastle