One of our vast crowd of readers commented in response to
yesterday’s posting that mentioned Daniel Webster’s dictum from the
Massachusetts Constitutional Convention of 1820 (“Power naturally and
necessarily follows property”), “Maybe that's why the State
taxes us for owning property, and in extreme cases exercises eminent domain —
just so we always remember who’s ‘boss’.”
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| "Ring around a Roosevelt, pockets full of dough" (1938) |
“Maybe”? (We were tempted to say, “Yuh think?”) This has been evident since the New Deal, and
why Dr. Harold G. Moulton, president of the Brookings Institution from 1928 to
1952, wrote his 1943 pamphlet The New
Philosophy of Public Debt. Moulton
noted that even if the State can raise all the money it needs by floating new
debt without limit (a theory Moulton warned leads straight to totalitarianism,
p. 88), taxation is still “useful” as a means of achieving social goals. As Moulton noted,
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| Harold G. Moulton |
“The
implications of the new philosophy of public debt from the point of view of
taxation are engaging. If the growth of
the public debt is of no moment, one might at first thought be inclined to ask
— Why go to all the trouble and expense of collecting taxes? Why burden the public with ever-increasing
levies? Indeed, if the purpose of fiscal
policy is not to balance the budget but to obtain the largest possible ‘net
income-creating’ expenditures — as measured by the size of the cash deficit — why not promote the desired
end by cancelling all taxes?
“That a
reorientation of thought with respect to tax policy would be necessary is
suggested in a statement already quoted: ‘Once freed from the obsolete concept
of the balanced budget, the larger uses of federal taxes can be creatively
explored.’ (“The Domestic Economy,” Fortune,
December 1942, p. 16.)” (Harold G. Moulton, The
New Philosophy of Public Debt.
Washington, DC: The Brookings Institution, 1943, 72.)
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| Henry C. Adams |
In other words, even if the government could raise all the
money it needs just by going deeper and deeper into debt (a danger against
which Henry C. Adams warned in Public
Debts: An Essay in the Science of Finance, 1898), it would still be
necessary to tax for “social purposes.”
Taxation for “social purposes” (Moulton gave control of
inflation and job creation as the principle goals of taxation under this new
philosophy) is a cornerstone of socialist monetary and fiscal policy — policy
that is specifically designed to destroy private ownership of capital. It is also, paradoxically, a cornerstone of
what many people accept as Catholic social teaching.
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| Pope Leo XIII |
The Catholic Church, however, has condemned socialism! In his first encyclical, Inscrutabili Dei Consilio (1878), Leo XIII condemned the evils
afflicting society. In his second
encyclical, Quod Apostolici Muneris
(1878), the pope specified the groups who were behind the worst of the evils: the
socialists. As he explained,
“At the
very beginning of Our pontificate, as the nature of Our apostolic office
demanded, we hastened to point out in an encyclical letter addressed to you,
venerable brethren, the deadly plague that is creeping into the very fibers of
human society and leading it on to the verge of destruction; at the same time
We pointed out also the most effectual remedies by which society might be
restored and might escape from the very serious dangers which threaten it. But
the evils which We then deplored have so rapidly increased that We are again
compelled to address you, as though we heard the voice of the prophet ringing
in Our ears: ‘Cry, cease not, lift up thy voice like a trumpet.’(Isa.
58:1) You understand, venerable brethren, that
We speak of that sect of men who, under various and almost barbarous names, are
called socialists, communists, or nihilists, and who, spread over all the
world, and bound together by the closest ties in a wicked confederacy, no
longer seek the shelter of secret meetings, but, openly and boldly marching
forth in the light of day, strive to bring to a head what they have long been
planning — the overthrow of all civil society whatsoever.” (Quod Apostolici Muneris, § 1.)
This seems pretty clear.
As we will see in the next posting, however, it did not go down well
with some people. The controversies
started almost immediately — as did the effort to convince people that the
Catholic Church meant exactly the opposite of everything that the popes were
teaching.
