(i) Exemption. Much of the expenditure of local divisions of government is based upon the large temporary sums of so-called “gold” dollars which can be borrowed from the more fortunate by offering sanctuary till the storm is over, or, in other words, by the promise of immunity from certain taxation. This, as shown above, entails a wilful, if not openly expressed, policy of extracting ultimately the payment of principal, the current payment of interest, and all the loss of revenue involved in exemption, from those who, having no surplus funds seeking exemption, must, month by month and year by year, because of old debts, new borrowings and mortgages, followed by defaults, tax-penalties, foreclosures, and finally by deficiency judgments, piece by piece transfer their real estate, their chattels and finally their independence to the complacent holders of tax-exempt securities. In short, government expenditure is not based upon any calculable annual increase of real value, but upon an invisible coercion of the producer and consumer, and direct bribery of the holders of title to our so-called “gold” dollars—a process which definitely involves us in a policy of robbing the economically sick and dying for the benefit of the stronger.[1] It would be a less painful task to write thus of some old-world autocratic government; but we must face the fact that these blind policies and vicious practices are our own. The slogan of our many Bureaus, Federal, State, County and Municipal, and the buyers of their bonds, might well be, “Let us eat, drink and be merry, for to-morrow you die.”
In exemption of any kind, under our present system of taxation, whether offered to that type of capitalist who is tempted into the position of publican, or to politician, teacher, policeman, judge or to the Church, we have so definite a disregard of the relation between economic power and responsibility that confusion is inevitable.[2]
- ↑ “Our public revenues seem destined to further shrinkage by reason of the huge investments that are going into tax-exempt securities, the inevitable effect of which must be to increase the burden upon industries and properties that are not tax-exempt…It has been estimated that approximately thirty billions are now outstanding in bonds that are wholly or practically tax-exempt, the revenue from which should approximate one and a quarter billions per annum.”—The Business Outlook, May 15, 1922. Wells-Fargo Nevada National Bank of San Francisco.
- ↑ Banks organized under the Federal Farm Loan Act in selling their bonds advertise as follows: “The bonds issued by the Banks are instrumentalities of the United States Government and are exempt from Federal, State, municipal and local taxation.” They go further than this, and write the desired subscriber to request his secretary to estimate how
