The Forum: Those teasing taxes
S. SMITH (Scunthorpe) writes:—
“I have read your leaflet on Rates and Taxes, but cannot agree as to your views in suggesting that the workers do not pay all the taxes, etc.
“I always thought that the workers produced all and find even the taxes for the idle class.
The railways, as you know, pass on the increase of the rise to the public. This is generally the
same with all commodities.”
Our correspondent argues that the working class pay the taxes on the ground that they produce all wealth. He also holds to that view because he thinks prices of commodities are increased to cover taxation.
Both these theories, however, are disposed of in our leaflet. But for one person to urge both these theories shows that confusion exists upon the matter.
If the working class are held to pay the taxes because they produce all wealth, then the further argument that they pay also in increased prices is quite superfluous. Mr. Smith should first decide which view he will advance.
Both, however, are false. True, the workers produce all wealth. But as they only get a portion of it back—in the shape of wages—they evidently are not in a position to pay for everything. As the average wage of the worker is just enough to keep him in the condition to go on working, his class have no fund out of which to pay the millions that are levied in taxes. Those who take the major portion of the wealth—the capitalists—must pay the taxes, etc., out of the “profits” wrung from the working class.
Our friend says that the railways pass on the increase of the rise to the public. I presume he refers to a rise in the wages of railway employees.
This is another matter, but it has one feature in common with the question of taxation which shows it to be fallacy. If the railway companies could raise their rates upon an increase of wages, why their fierce resistance to the demands for higher wages ? If merchants and traders can simply pass the increase in the taxes on to the “public,” why do they also make such a determined effort to prevent taxes being raised ? These questions await an answer.
Even if the railway companies could raise their rates it would affect the employers more than the workers.
The major portion of the income of railways here is derived from “goods traffic,” and a very great part of the passenger income proceeds from the pockets of the “idle class.” Though railways environ every city and stretch out across the country, the chance of the workers visiting distant spots is more remote than ever.
But one need not worry. The railway companies, just like traders, have themselves confessed their small chance of getting higher prices. They fear to increase their charges, knowing that directly they do so their income falls. This is the case, of course, especially with the worker. The brewers and publicans told us that the quantity of liquors sold declined rapidly when they tried to get higher prices. They know how true it is that the workers’ purchasing powers are strictly limited, and that a rise in prices means a fall in the quantity sold.
The railways, like the merchants, fight against rising wages and rising taxes. When, however, they are defeated and a rise is effected, they sometimes try and get increased prices on the ground that “the cost has gone up.” But how seldom the pretext succeeds every student of current affairs can testify.
Taxes or no taxes, property owners are always seeking and getting the highest prices that the market will sustain. Rising wages and taxes are only lame excuses to “feel the pulse” of the consuming world.
One fact has driven home the truth of our position very greatly recently. During the past seven years the taxes upon the common necessaries of life have been continually reduced, yet the rise in the prices of those articles has been, and still is, phenomenal.
That alone should convince any worker that prices are not governed by taxation.
A. KOHN.
[Your second letter of enquiry, which came to hand too late to be considered in the present issue, will be answered next month.—Ed.]