Functional socialism

TAXATION 1

or policy? The fact is that this tendency in politics is the illegitimate child of Radicalism and State Socialism. It certainly indicates the intellectual bankruptcy of both. If large incomes are legally to be permitted, the system that produces large incomes has equal sanction. If, however, large incomes are to be the object of definite bias in taxation, then the economic system cannot be defended. The argument seems to run that, whilst the State cannot directly intervene in industry, it can mark its approval or disapproval by discrimination in taxation. This is obviously a departure from the fiscal canons to which we have adhered for a century or more. The answer of any functional authority would be that it can arrange salaries and incomes on an equitable basis and will the Treasury kindly attend to its own business? The plain duty of any Socialist Government would, therefore, be to provide the constitutional machinery for a functional economy and not to worry and irritate by tendentious taxation, which can only be defined as “willing to wound, but yet afraid to strike.”

We must not, however, interpret our fiscal canons too absolutely. The taxation of industry, for example, calls for treatment fundamentally different from land and rent. I cannot, as yet, picture to myself any functional organization that controls all our land and, therefore, controls rent. Agriculture is obviously functional; but ground rents in our big cities are a different problem, essentially political and only economic in a secondary sense. Leasehold rents, for