Harry Quelch 1909

Socialism and Taxation

Source: Social Democrat, Vol. XIII No. 11 November, 1909, pp. 481-486;
Transcribed: by Ted Crawford.

It is somewhat noteworthy, and certainly not without significance as showing the identity of interest between all civilised nations, that precisely the same questions are agitating the peoples of the chief countries of Europe at the present time. Clericalism, Parliamentarism, and Fiscal Policy are the three chief questions which are engaging the special attention of the working-class movement, in varying degrees, in England, Germany and France. Recent events have shown that Clericalism is still “the enemy”; and that whatever may be said for any religion – and we Socialists must always hold to the principle that religious belief is a private matter – the Church of all denominations in every country is the buttress of the existing social order and an instrument whereby the religious idea – of any faith – is made to subserve the interests of the dominant class. While this has been strikingly made manifest recently in Spain and France, it must not be supposed for a moment that it is not also true of England and Germany. Although in these latter countries, for a number of reasons, Clericalism may be less bold and arrogant, it is only more astute and not less dangerous than in the former.

Parliamentarism is on its trial; but the present form of the political struggle manifests itself in a demand for the widening of the basis of representation, by universal adult suffrage, and for its reform by the abolition of fancy franchises and the application of the principle of proportional representation. In France and Germany the whole working-class movement is united in its demand for these reforms. Here in England, however, where we have about the most absurd and antiquated political system in Europe, our “Labour leaders” are opposed to Proportional Representation, and appear to be in doubt as to the need for any political reform whatsoever, except that of giving votes to a privileged number of women on a property qualification.

They have adopted precisely the same reactionary attitude with reference to the taxation proposals of the Government. Hitherto it has been a sound axiom among Socialists that the incidence of taxation was a matter which did not greatly concern the working-class; that, fleeced as the workers are in the workshop and the factory, the expenses of government must, perforce, in the main, be met out of the surplus-value created by their unpaid labour. That being indubitably true, it could not greatly concern the workers whether the bulk of the taxes were paid by landlord or capitalist – the Duke of Donnohoo or Sir Gorgious Midas; Lord Tomnoddy, or Mr. Plugson of Undershot – it all came out of the plunder of the workers, which would be taken from them in any case. What did matter to the working-class was the manner in which the taxes were spent. The revenue might all be spent in maintaining, protecting and advancing the interests of the propertied class, or it might, under a sympathetic Government, be largely devoted to improving the material condition of the common people. In the latter case, the taxation proposals of a Government might be worthy of the support of the masses of the people and their representatives; in the former they should meet with their hostility, or at least, their indifference.

On the other hand, while recognising that taxation is, and must be, mainly drawn from the surplus-value, of which the workers are despoiled under any circumstances; it has had to be admitted that indirect taxation in the shape of customs and excise duties, especially when imposed on their luxuries, does afford a means of taxing the workers, another means of still further fleecing those who have already been stripped almost bare by industrial exploitation.

From these conclusions were deduced three definite principles for the guidance of the working-class and their representatives in dealing with the question of fiscal policy: (1) The general incidence of taxation is one which in the main concerns the master class, the appropriators of surplus-value, alone. (2) All expenditure which is solely in the interests of the master class – notably expenditure on armaments – must always be strenuously opposed. (3) All indirect taxation should be opposed, and all taxes should be levied upon incomes over a fixed minimum, so as to ensure that those who drew the largest revenues should contribute the largest share towards the cost of their own government.

That was the clearly defined fiscal policy of the working-class movement. Now, it would seem, we have changed all that, at any rate in this country; for during the last six months we have been witnessing the unedifying spectacle of “Labour” representatives tumbling over each other in their eager enthusiasm to support the bourgeois Budget of the Liberal Government in contravention of all three of these principles. The first principle is involved in the chief reason advanced for this extraordinary conduct on the part of our Parliamentary Labour Party. Mr. Lloyd George, we are told, is going to tax the landlords, and in his petty tax on undeveloped land, his increment tax and his super-tax, he is introducing quite new principles of taxation. That is not true; but even if it were, these new principles only concern the propertied class. If the landlords are to be taxed a little more, it only means that the capitalists are to be taxed a little less. It does not mean that the robbery of the workers is to be mitigated in the slightest degree.

The second of our principles is transgressed by the Labour members supporting a Budget, and increased taxation, directed almost exclusively to serving the interests of the master class. Over thirty millions goes in interest on the National Debt – the only thing that is “national” in the whole category of services for which the Budget provides – and over sixty millions are for naval and military armaments. Thus more than two-thirds of the total goes in paying interest on a debt contracted by “monarchs and statesmen” – a debt for which the people were never responsible and which has been repaid over and over again – and for the provision of armaments which the Labour Party is pledged to strenuously oppose!

And it is chiefly on account of increased armaments that increased taxation is necessary. Old Age Pensions, Labour Exchanges and the Development Scheme of the Government are urged as reasons for the increased taxes and as justification for the support given to the Budget by Labour members. But altogether the expenditure on these is proportionately a mere fleabite, less than ten millions in all, and should have been provided for, either by increased taxes on property or by reduced expenditure on armaments.

Our third principle is contravened by the support given to the increase of indirect taxation provided for in the Budget. This amounts to nearly half of the total increase, and at least five millions of this will be drawn from the working-class, and will involve, it is estimated, additional expenditure by the workers, on the articles taxed, of no less than twenty millions!

In Germany the proposal to increase indirect taxation has met with the fiercest opposition from the Social-Democratic Party. They have instituted a boycott of spirits to defeat the new taxes on those, and a “beer war” against the additional tax on the national beverage. “Down with the Radicals, who support the plundering of the people by indirect taxation!” they cry. “Up with the Radicals who propose to plunder the people by indirect taxation!” is the slogan of our Labour members.

Keir Hardie says, “It may be that some of our men have been too unqualified in their praise of the Budget, and certainly it is a blot upon it that by a recent concession it gives a relief of half a million yearly to good landlords who pay income tax, while it leaves the breakfast-table duties untouched.”

A blot upon it, indeed! Why, it is all blots. As for “unqualified praise,” we have the Leader of the Labour Group, Mr. Henderson, in the debate on the third reading of the Finance Bill, pledging, for it, the “warm and united support” of his Party. “The Labour Party,” he said, “would take their stand in favour of the whole of the principles contained in the Bill, and they would do their level best to influence the great mass of the people of this country to give a verdict in favour of those principles.” That is “unqualified praise,” indeed, and, what is more important, unqualified support, for all the principles and all the “blots” contained in the Bill, including, increased expenditure on armaments, and increased indirect taxation.

Mr. Hardie contends that, after making all allowances, “the Budget is still worthy of support because of the principles which it introduces for the first time into our fiscal system.” It would be well to know what these principles are. It is rather interesting to note that in the debate in which Mr. Henderson pledged his party to unqualified support of the Budget, Mr. Lloyd George had been at some pains to prove, and did successfully prove, that all the provisions of the Budget which Mr. Hardie affects to regard as “new principles” have had the endorsement in the past of the Tories who now most strongly animadvert upon them. It was rather unkind of Lloyd George, but he couldn’t help it. He had to show, in order to prove that his proposals did not deserve the hostility of the Tories, that it did not merit the unqualified praise and support of the Labour men. Mr. Hardie says that “The super-tax and the various taxes on land values and mineral royalties are of the very greatest importance from our standpoint.” As a matter of fact, they are of no importance at all. We have no objection to the Government taking not merely a portion, but the whole of the mining royalties; but if these are to be taken simply to relieve the capitalists of an amount of taxation which they would otherwise have to bear, the taxation or even the appropriation of royalties, is a matter only of the most infinitesimal importance. All such questions are matters of dispute solely between different sections of the exploiting class, and it is idle to suggest that, however they may be settled, the miners, or any other section of the working class, or the people at large, will be benefitted in any shape or way. It is most deplorable that our Labour Party should have departed so far from the clearly-defined principles which should have guided them in these matters, and their policy is in striking contrast with that of our German comrades, who refused to allow themselves to be bribed into supporting an increase of indirect taxation by the promise of a succession duty, and vehemently denounced the Radicals who did so.

H. Quelch.