A Word On Taxation

"Modern taxation is legalized robbery, wrote Major Douglas, the originator of Social Credit. Of course, as Douglas, also remarked, "Public services require a provision both of goods and human services, 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."

The evil in the existing system of taxation is that it makes taxation bear on the money distributed for production made, instead of making it bear on the capacity to supply goods and services. Whether taxation as we have it be imposed on property or on wages or on profits, it exacts money. This money can only be taken from an income. All taxation therefore robs the taxpayer of his earnings; a downrightn robbery; even if legalized.

A Social Credit economy would do away with this raiding on the citizens acquisitions. Public services would not be met by a levy upon financial incomes, but would be a charge against the total national productivity, much of which is unutilized. Financial credit — money — would be issued at the rate of new production and withdrawn at the rate of consumption through the adjusted and compensated price mechanism. The government's consumption added to the individual and business consumption, makes up the total consumption. But likewise, the government's production (public developments) is added to individual and business production to make up total production. The retail discount would vary according to the relation between total consumption and total production.

An influential economist of his time and the first to grasp the value of Douglas' great discovery, A. R. Orage once said: "The ultimate 'collateral' upon which banks create and issue new money is the difference between actual consumption and potential production. And by doing exactly what the banks do when they issue loans, make overdrafts and buy gold and securities — namely, create money upon the collateral of the nation's unutilized productive resources — the Treasury could finance public expenditures without calling upon its citizens individually to sacrifice a penny of their present incomes."

(A Primer of Social Credit by Louis Even, pages: 42:43)