Direct Credits for Everybody
By Alfred Lawson

CHAPTER 16

Taxes Will Be Eliminated

An industrial corporation employing thousands of men does not make them pay taxes to defray the expenses of the plant. Still if that was done it would be no more peculiar and uneconomic than making individuals pay taxes to defray the expenses of the government.

Of course we all understand that money must be furnished to the government to meet its heavy expenses. But large industrial corporations have to meet heavy expenses also, and they do it without taxing individuals who work at the plant.

The difference between the government method of meeting its running expenses and that of large corporations is, the government way is impractical and wasteful, and the corporation way is, more or less, practical and economic.

The cost of collecting taxes from each individual separately is extravagant, and in many cases it costs more to collect them than they amount to. Besides, it is a general nuisance and causes everybody much annoyance, litigation and loss of time and money.

There is a better way to raise money to meet governmental expenses; a way that will cut the cost of collection from 50 percent to 85 percent, as well as saving everybody's valuable time, the wastage of which in these days is enormous.

Times have changed considerably since the tax system was invented, and it is as much out of place nowadays as the bow and arrow in warfare.

What is government anyway? Isn't it municipal, state and national management of the people's affairs? Do not the people choose their representatives to manage their political affairs and pay them salaries for doing it? Do not the stockholders of a corporation choose their representatives to manage their business and pay them salaries for doing it?

Where do salaries of corporation managers come from? Not out of the pockets of the stockholders.

Then why should salaries of political managers come out of the pockets of the people?

Isn’t it true that salaries of corporation managers, as well as all other running expenses, come from the profits of the business?

Isn't a well organized business run so that all salaries, improvements, and running expenses are added to the general cost of production? And then isn’t the selling price of the product arranged to include all of these expenses, as well as the profits?

Is there any more direct way to run a successful business?

Everybody’s political business can be managed just as efficiently as the business of an industrial corporation if the people will order their representatives to manage it that way.

Direct Credits for Everybody means direct credits for the government as well as for individuals. To begin with, the government will not have to pay interest for the use of money it makes exchangeable.

At present if the government needs money for improvements or other things, it borrows it and issues interest paying bonds which are turned over to privateers for less money than the bonds call for. The government is forced to do this, the same as individuals and corporations, because there is not enough money in circulation to meet general expenses.

In this manner the government is kept in perpetual debt trying to pay the different interests upon the different bonds that are forever accumulating.

It is estimated that the combined municipal, state and national debts of the United States of America amount to more than One Hundred Billion Dollars (1931). And if this compound interest-paying scheme is kept up, the debts will increase to such an extent that all of the wealth of the country will not be enough to pay them, and the privateers who control the money can force the nation into bankruptcy in the same way they do shopkeepers and manufacturers when they fail to pay the interest, or, take away the home of the widow when she owes interest on the mortgage.

Of course it would be just as easy for the government to print and issue its own money and lend it to itself without interest as it is to print and issue interest-paying bonds. Its stamp of approval on money is just as valuable as on bonds. But in that case the money owners would get no graft from the non-interest paying money, whereas they get it everlastingly from the interest-paying bonds.

So what the government must do to save itself from eventual bankruptcy is to stop squandering the public money like drunken profligates when giving $1040 in currency for $1000 in bonds annually. For if it does not, then that extra $40 given to privateers for nothing each year on every $1000 bond will finally eat up the government, body and soul.

There is nothing to stop the government from printing money and lending it directly to itself without interest any more than there is to stop them from printing bonds and paying interest on them for the use of the money that would have no value without the government's endorsement.

There is no good reason for the nation, state or municipality to get into debt at all. Its money in circulation, however, must be backed up by everybody's wealth, for that is what will give to it absolute stability and constant purchasing power. With plenty of money to meet all payments and no interest to meet annually there would be no reason to get into debt.

Under the system of Direct Credits for Everybody the whole success of the nation will depend upon the balance maintained between government, industry and the needs of the people.

Statisticians will estimate beforehand approximately what will be consumed by the people during the coming year, just as a restaurant owner estimates the quantity of food his patrons will require for the coming week.

The government will state in advance what improvements it intends to make and the cost of its running expenses.

Industry will then figure the cost of production, plus reasonable profits, plus the cost of running the government.

Thus everybody will be employed in a general way by industry. Industry will be charged the cost of running the government, which will be added to the cost of general production, and paid by everybody in the purchase of products.

By this direct and practical method the government will no longer have to collect taxes in the antediluvian penny ante style from each individual separately.

In other words, the cost of running the government will be added to the cost of production and distribution of wealth. It will be paid over to the government by the producer and charged to everybody as the consumer.

And that direct and economic procedure will eliminate entirely the ancient and honorable taxpayer.

As statisticians will figure the approximate needs of the people and the cost of production of the things needed, including the cost of running the government and reasonable profits for the producer, so they will figure just how much money will have to be put into circulation for the producers to use in paying operating expenses, including the services of everybody at such salaries as will permit everybody to purchase everything they need from the producers.

Statisticians will also figure out an equitable method of exchange in relative value of products imported and exported between different countries and their different moneys.

But the stability of each money must be backed by the entire wealth of the country that issues it and not by the quantity of metal it has stowed away in vaults.

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