The Socialists - The Theory Of Taxation

The Socialists, The Theory Of Taxation

The program of social reform advocated by the followers of Saint-Simon attempted to use inheritance as a means of trans­ferring ownership from individuals to the state. Their argument was clear. Through individual ownership of capital only the needs of the individual and his immediate dependents were taken into account. No general view was possible. But since capital is so important to society as a whole as the means of pro­duction, the chaos which existed in the uses to which capital was put should be eliminated. Crises, poverty, and economic anarchy, the Saint-Simonians believed, could be traced to this condition in which capital was not put in use according to any effective plan.

The only means of escape was through collectivism, that is, community ownership of capital. To accomplish this end they believed the state should become the inheritor of all forms of wealth; private inheritance would no longer exist. "The law of progress as we have outlined it would tend to establish an order of things in which the State, and not the family, would inherit all accumulated wealth and every other form' of what economists call the funds of production." The government once in possession of all capital could, then distribute it in- the way best suited to community needs. In other words; the government would become the source of capital; lending it, as it were, to those best able to use it. Each man would be assigned work for which he was best fitted, and each would be paid according to his labor. The formula- is stated. briefly, "Each one ought to be endowed [with capital or land] according to his merits, and rewarded according to his work."

The contribution of Karl Marx to the general thought on taxation is not at all original. The ultimate goal of history is to Marx the establishment of the communistic state where private property has completely disappeared. In the process of advancing toward that goal, however, certain practical measures are neces­sary. Therefore in the political program for immediate action which he and Engels incorporated in the Communist Manifesto several types of taxation are suggested. First, there should be the abolition of all private property in land and the application of rents to public purposes. Second, a heavy progressive or grad­uated income tax should be introduced. Third, all inheritance should be abolished. This, of course, is the unquestioned use of taxation to accomplish a social purpose. Revenue is not even a minor consideration. There is no doubt that under the influence of Marx, every socialist program from that time forward has in­corporated similar tax provisions, in some cases less confiscatory, but certainly aiming at state ownership of the means of produc­tion and the levelling of incomes within certain limits.