The Richmond Virginian. (Richmond, Va.) 1910-1920, 1919-07-06

is a gaping deficit In the normal year.
II the present basis Of taxation is
adhered to. Of At least 1oo.0oo.ooo. AMI
perhaps nearly 2oo,ooo.c0o pounds.
II is quite clear. therefore. that un-
less some heroic remedy IL adopted. or
binary taxation will have to be In
creased. And this increase will have
to be very severe. 1t IL of no use
attempting to bridge and gulf by
fancy proposals. which. whether good
or bad in themselves. can only pro-
duce a few hundreds of thousands Of
revenue.
The main source will have to be the
income tax. Already the principal
rate Of this tax stands at the terribly
high figure of SIS Ga cents) in the
pound. and the chancellor Ia evidently
expecting to have to increase the rate
to meet the reform likely to be recon-
mended by the income tax commission.
Therefore. II the deficit is to be made
good by ordinary taxation the country
will have to face an IS or 4 los tn
come tax. with supertzx in addition.
Those who reject heroic measures are
asked to consider how serious de-
torrent to cxertion this heavy income
tax is likely to prove.
The object Of levy on capital il
to make 1t possible to balance the
budget by clearing out Of the way the
charges on the national debt. When
they are thinking of national finance
they say that It represents the money
lost in the war and is liability by
which the country as whole is poorer
than it was before. When they are
locking at their own wealth they in
clude consols and war loan among their
assets.
The truth is that the war debt rep
resents in the main change In dis
tribution rather than In amount of
the total wealth of the country az a
whole. All that part of it which Ii
hold internally appears on both sides
Of the account Only the part of II
which is held by foreigners must be
reckoned as dead loss to the coun-
try as whole.
While II Is true. therefore. that the
result OF the war has been to reduce
the aggregate wealth of the country,
and that hard work will be required
to restore this aggregate, the prob
lem of meeting the national debt is
in the main a problem not OF produc-
tion but Of distribution.
Our finances are in a tangle because
the reckoning which each one OF us
makes of our own individual wealth
is subject 20 the vast sum owed by
the state. for which we. as citizens
Of the state. are all Jointly liable. Sc
long as We 20 on meeting this la
bility by paying interest on II out Of
income the unreaiity will remain; whef
we make up our mind to face 1t by
dividing up the joint liability sew
| orally between us we shall clear 1t up
| If the state we're a company which
! bad snent money in capital expendi
| ture which was not represented b.
| material assets we should apply u
/ the court for permission to write of
| the part of it's capital to which ~
| assets correspondent We might e
| farther and write down the nomina
| value OF our shares. For in business
we see the advantage Of making thu
representation of the facts correspond
| TO the facts themselves. In the gov
eminent of the country. so far we
have preferred the ostrich-like polio,
OF pretending that our wealth is very
different from what 1t is.
Viewed from this standpoint. man,
Of the difficulties which unthinkins
persons see in capital levy disappear
The impossibility Of securing in cast
at one time the whole sum OF 5000.
uoo. 900 pounds-$3o.o 0o, 100000. the fol
10y Of reducing the material capital o
the country at the time capital Il
most needed. simply do not arise OF
the bookkeeping transaction. which in
wolves in the main merely the trans
ference OF the title deeds OF wealth.
Difficulties. OF course. there are. hu
they are by no means insuperable. ane
are probably far less than those which
will have TO he encountered in any
other method of meeting the vast STATE
debit