Economic Problems of the Community

a) Taxation

No government can function without the support and cooperation of the people whom it serves. A most important form of such support and cooperation is contribution of money for the maintenance of the government and for the prosecution of its public services. All citizens are called upon to make such contributions, not as the payment for service rendered (else the wealthy and more independent would have little or nothing to contribute), not as rent for land (else many citizens would need to contribute nothing at all; and, as a fact, the government does not own the land and is in no sense a renter or landlord), but as a requisite personal contribution to the common good. Such contributions, fixed according to a definite scale and exacted by public authority, are called taxes. The State is a natural society; man requires it; he has, therefore, a natural obligation to support and maintain it. And if this is true, the State has the right, in natural law, to exact of its members the means of support and maintenance. Hence the member of the State, i. e., the citizen, has a personal obligation to pay taxes. The amount of taxes justly required of each citizen is determined, on the one hand, by the needs of the State, and, on the other, by the ability of the citizen to contribute. This ability is relative, for some citizens are much more able to contribute than others, and hence the amount of taxation must be determined by a sliding or progressive scale which will meet the abilities of all classes of citizens without doing injustice to any. It may be added here that, while all citizens are required to contribute their part to the upkeep of the State, the individual citizen has rights and duties prior to those of the Commonwealth, and he cannot be made to pay taxes in such amount as would deprive himself or his family of the necessaries of life. It is po easy matter to fix upon a scheme of taxation which jwill be perfectly fair to all concerned. For this reason the question of taxation is discussed as a social problem. And while the moral aspects of the problenji are immediately apparent, the maintenance of the State is itself a matter of economics, and for this reason we study taxation as an economic social probleffi. It requires no very extensive knowledge of the history of nations to recognize the far-reaching social effects of taxation. Unjust or unbalanced systems of taxation have often been potent factors in the spread of poverty, have led to wide-spread unemployment and periods of depression, and have sometimes promoted the spirit of unrest and even rebellion in the citizenry at large. On economic as on moral grounds it is of prime importance for the State tb tax its members justly. For just taxation, the following principles must be faithfully followed: (cr) Taxes must be necessary. That iS, the fund which the taxes are levied to supply mutet really be needed to serve the common good. Taxes imposed to provide a “pork barrel” for politicians, or to keep needless officials on public payrolls at fat Salaries, or to promote works which actually serve do public need or utility, are unjust, and the

State which imposes them places a needless burden upon its members and inevitably prepares for itself social upheavals and possible revolution. Examples of such unjust taxes are those levied to build elaborate armaments, to supply unnecessary fleets of ships and aircraft, to further inept and very expensive schemes of building and equipment in the name of •education, postal service, etc. (b) Taxes must be proportionate. That is to say, the taxes imposed must be proportioned to the ability of the citizen to pay. Economists have calculated that taxation which brings in more than 8 percent of the national income are likely to be excessive. In countries where taxpayers have, in general, an income which allows them a comfortable margin beyond the requirements of decent living, a higher rate might fairly be exacted. But, taking the world by and large, a tax which runs to 12 or 14 percent of the annual national income is almost certain to be unjustly excessive. Excessive taxation has been the occasion of untold misery in times past, and it has done harm to the attitude of citizens towards their duty of paying taxes; as Charles Devas points out (c/. Political Economy, third edition, p, 579), it has given rise to “the popular view that to evade the payment of taxes is neither dishonourable nor wrong.” Devas, by the way, regards as mistaken the attempt of economists to use the total income of a country as a criterion for fixing a just rate of taxation. It is not, he declares, the simple income that is properly taxable, but “what is available after absolute and conventional necessaries ikave been satisfied; and the greater this surplus income, the greater the taxable capacity of the country” (loc. citp. (c) Taxes must be equitable. That is, taxes must represent an equal and impartial burden to all citizens. Thus members of the State ipust each bear that burden which is suited to his capacity or financial strength. To secure this equality, it seems best that taxable incomes should be subject to a progressive taxation up to a certain amount, and beyond that the rate of taxation should diminish. Thus, if a man who earns $1500 a year is taxed 4 percent on his surplus income, a man who earns $5000 a year should be taxed at a higher rate, say 6 percent. As taxable income increases, the rate should increase, until it reaches a definite amount of the income itself—say one-half. At this point the rate of taxation should be fixed (for the very large income^ which it would affect) or the remainder of the income should be taxed at a much lower rate. Taxes levied on income are called direct. These are sometiihes supplemented by indirect taxes such as those levied on purchases of cosmetics, amusementtickets, etc. Indirect taxation is not in itself unjust, but it should not be levied on the necessaries of life,

(d) The system of taxation should be economically and politically sound. Taxes should be levied in such wise and on such articles as will stimulate the industry of a country and encourage home trade. They should be levied effectively upon all voters; they should be such as a majority of citizens consider right and fair; they should tend to keep extravagant expenditure at a minimum among the citizenry; they should not become forces, in any case, for the destruction of the right of ownership or property.

b) Balance of Population

It is requisite for the economic welfare of the State that the population be duly balanced between the city and the country. The city will normally have its share, and tends always to have more than its share. This particular economic and social problem turns upon the necessity and the difficulty of keeping the rural population up to its due measure. In our day industrialism is a powerful magnet drawing people in thick clusters around the great city factories, into shops and offices, and away from the farm and the rural village. Not only has the economic attraction of a steady position with (ostensibly) assured wages broughj thousands from the soil to the apartment and tenement; a tremendous moral influence to the same end has been exercised by the current belief that the city-dweller is socially more imposing and important than the rustic, more refined and cultured, more alive to the interests of the day, more alert and clever, better situated to enjoy the pleasures of life and to taste adventure. Against these two potent influences for an unbalanced population, that is, for an urbanized population, the economist and the sociologist must join forces. People, of course, are free to live where they choose; They cannot be herded into the country if they choose to live in the city. They cannot justly be subjected to a selection by draft or conscription by which an able-bodied and capable army would be sent Into the rural districts to do the nation’s farming. If the population is to be kept at proper balance, people must be shown the advantages of life on the land; they must be taught the value and the rewards of rural life, as opposed to life in the large city. NoW—showy and artificial pleasures and employments &part—the country offers many sound attractions vdiich the city cannot offer. The first of these, and by far the most important, is that family-life tends to flourish and bear rich fruits in the country, whereas in the city it tends to decay. A sufficing instance of this truth is found in the fact that thecate of divorce is much higher in the city than it is in the country—fifty percent higher, in fact, and perhaps more. Again, the life of a family in a large city is almost inevitably subject to influences which mar its natural vitality and render it artificial and mechanical; the family-group is never truly self-contained; an ugly individualism tends to draw its members apart; each member has his own employment, his own friends, his own ideas of an evening’s amusement, and the city lays a constant opportunity for self-indulgence at the very door. In the country, these distracting and dividing influences do not exist at all, or exist in a very minor way. Rural employments regularly tend to draw the family together, to promote interdependence with division of labor, to keep the interests of all common. City families die out; country families tend to become more stable. A State in which most of the citizens live in cities while only a relative few are on the soil, is a State that is doomed to early extinction. The “bold peasantry,” of which Goldsmith spoke so glowingly, is just as essential to-day as it was in the eighteenth century, when the poet set down the now familiar lines. The family on the soil usually owns its home and its lands; the city man is usually a renter. The man in the country has in his land the means of life; city property is sterile. The city man is subject to the caprice of the times and of the lords of business and finance; a depression may occur at any time, and once his employment is taken away, he is left dependent upon what little money he may have saved. The man on the soil does not feel the depression so suddenly or acutely, and, even with business at its worst, he has some fertile means of livelihood. The man in the city usually learns no trade; the countryman has what may justly be called his profession. If more people were on the soil and fewer in the crowded cities, ownership of land would be more widespread, self-employment would be a more notable phenomenon of our social life; a spirit of sane independence and an increase of self-respect would spread abroad through the nation. Without the productive soil, the city could not exist. The farm is the larder of the city. If the nation is to exist as a self-supporting entity, it must keep a due proportion of its people on the land. It is true that, on the face of things, the city offers many advantages. The man in the city lives close to church and school. He has the convenience of automobile, bus, and trolley. The telephone is ever at his elbow. His house is likely to be more comfortable (if he be at all prosperous) than the farmer’s. He has electric lighting and refrigeration. He drinks purified and filtered water, and there is an abundant supply of it ever ready for his uses. His children have a daily supply of pasteurized milk, fresh and pure, delivered at the door. The morning paper is on his doorstep at early dawn to keep him abreast of the world-wide march of events. If he is sick, a doctor is at hand. If a member of his family should require the prompt attention of surgeons, a hospital is just around the corner. Libraries, museums, lecturehalls, and theatres are close about him. He has the opportunity, now and again, of seeing the notable personages of the world en tour, of hearing them speak, of acquiring valuable views and opinions at first hand. If he is poor, social workers look after his needs; his children go to a school where capable practitioners attend to their eyes, ears, teeth, and keep a close check on their general health; sickness in the home brings the district nurse and the service of free clinics. Yet all these advantages (most of which affect the prosperous man rather than the slum dweller) are no longer peculiar to the city. The farmer is no longer a man of the backwoods. Good roads are everywhere, and the poorest farmer has a car. Many farmers have telephones, and all have kindly neighbors, and sudden sickness or need of surgery will bring the doctor or the ambulance to most country places almost as quickly as to the outlying districts of the big city. Many farmers have local generating systems to furnish them with electric light, refrigeration, power for radio and for modern sanitation systems. District schools in the country are no longer of the “little red schoolhouse” type. Splendid modern buildings, properly equipped, serve the educational needs of wide rural areas, and children are brought to the school by auto-bus. The school clinic and health inspection is becoming a commonplace even in remote rural places; district nursing is being extended to the country. Certain “cultural” advantages of the city are yet lacking to the farmer, but the more notable advantages and conveniences, once peculiar to the city, are shared nowadays by city man and country man alike. Churches and “missions” and “stations” bring to the farmer the essential service of the true religion, and the Catholic Church is making daily progress in rural work. If it be objected that the farmer is never well off in point of ready cash; that we are forever hearing of the farmer’s needs, and of his hard way of life, it may be retorted that ready cash is a convenience but not necessary for one who has always an abundance of the main requisites for life and health— food, shelter, clean water, and fresh air. But it is true that the farmer labors under many a disadvantage which proper legislation, scaling of tariffs, fixing of mortgage-contracts, etc., will obviate; and for such legislation and social action sociologists and economists must labor. Again, farming in America has been anything but the activity of a peasantry. We must seek to multiply the numbers of the small farmer, the farmer who does not raise foodstuffs primarily to sell them to somebody else, but to use them for himself and his family. Farming in America has been “industrialized” to such an extent that in many instances it is as much a “big business” as the giant automobile factory. The sort of farmer most needed for the balance of population is the farmer of the type once called a peasant proprietor. Of course, even such a farmer will have plenty to sell, and people who live in the city must have his produce; but the main motive behind any significant “back-to-the-land” movement must be the motive of living on the soil, and maintaining the family there, not the motive of making the farm a mere business plant, which is expected to win a big return in cash so that the farmer can presently sell out and move to the city to live. What we need for a stable, selfsupporting nation, is a great number of farmers who live on the land, and love the land, and are willing to stay on the land. The small farmer of France has existed for a thousand years; the peasant farmer of Canada is likely to exist for a thousand more; but the big business of American farming (which grew with a Puritan and Scotch-Presbyterian culture, and not, as the others, out of an essentially Catholic culture) is in dire difficulties within far less than two centuries. There is a profitable thought for the sociologist in this fact.

Summary of the Article

In this short Article we have discussed two problems of the community which, while involving moral issues, are practical economic social problems. We have discussed taxation, arid have seen that it is a natural requirement for the maintenance of government, and that it imposes a personal obligation upon the citizen. We have seen that the problem of taxation arises out of the difficulty of establishing a perfectly just and fair system of levies. We have laid down general principles, which must be followed in solving this social problem. We have studied, in the sedond place, the problem of a balanced population. We haye seen that the maintenance of a properly representative and proportional rural population is requisite for the furtherance of family life, for a wider ownership of land, for decent self-employment, £nd for the existence of a self-supporting nation. We have contrasted city life and rural life, ancl have mentioned some characteristics of the rural society most needed in America at the present time.