A TAX AS INSURANCE

Evening Post, Volume CXXX, Issue 6, 6 July 1940, Page 10

A TAX AS INSURANCE

An insurance premium collected on property for collective protection in war was suggested by Mr. S. G. Holland on Thursday as a means of providing war revenue. In principle the suggestion embodies the same idea as risk insurance, except, of course, that the funds are used to strengthen protection, not to compensate for destruction where it occurs. Though not quite so directly, this principle runs through all equitable war taxation. In this war the greatest things for which we fight are those which cannot be expressed in monetary terms —our free institutions and personal liberty and safety. That is why the utmost personal effort as well as property aid is demanded. But in deciding how material demands shall be made the greatest contribution is demanded from those who have the most means. Income tax, death duties, and various other taxes are designed with this end in view. The main difficulties in adopting Mr. Holland's suggestion would be two: (1) the lack of an accurate measure of real wealth; (2) the double banking of taxation through a*, levy upon returns from possessions and then upon the possessions. Valuation of property in its various forms is a complicated and difficult business. It is undertaken when the possessor dies, but only a small proportion of wealthpossessors die each year. If a fair and accurate census of the wealth of all living persons were to be made at once it would be a stupendous t as k—much greater tha.n the assessment of income. Then, when valuations had been made, the tax or insurance would mostly cover "part of the ground now covered by income tax and land tax, since so many kinds of property produce income. In considering the suggestion, these points should be borne in mind, as well as that cardinal principle of emergency taxation —ease and low cost of collection.