The Effect of Taxation on Pauperism

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Bolton Hall

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THE unphilosophical mind looks for causes in those things which present themselves most forcibly to the mind, ignoring the hidden but persistent conditions which have, in truth, produced the phenomena. Such persons attribute the rain storm to the thunder clap, overlooking entirely the natural processes which really and alone produce the rain. So it is with pauperism. Various societies seek its cause in intemperance, ignorance, immorality or crime, and refuse to consider that these things are themselves mainly the result of social conditions.

Of these social conditions, taxes and the laws are the chief factors. Drunkenness is not a cause ; it is not natural to ordinary men any more than dirt and disease are. Poor, dirty and intemperate! How can ten persons in one room be clean? How can a girl grow up pure in such a state? What relaxation or excitement can a car-driver or a sweat-shop tailor get except by drinking? Where are the clubs of the tenementhouses but in the rum shops?

Ignorance is not a cause ; how can a child who must go to work at seven years of age be other than ignorant? The wonder is that men are, not so wicked, but so virtuous.

Excessive taxation, injudiciously laid, has made indolent paupers of the Turks who were once a nation so vigorous as to overrun Europe. It has made paupers of the mild East Indians, whose disposition is so good that crime is hardly an element. It has pauperized Spain, a nation of the deepest religious tendencies. It has pauperized Italy, the successor and descendant of the mighty empire of Rome. It breeds pauperism in every civilized country. It is the continual dropping that wears away the stone, and if we would save the structure we must find means to arrest the causes of decay.

It is not to be inferred that I would urge the suspension of all charity until we can amend the tax laws, any more than I would urge the discontinuance of all dams and reservoirs intended to regulate freshets which are but the result of denuding the country of trees. While the trees are growing, these things are indispensable. But the remedy for an irregular water supply is in the restoration of the trees; for a wrong distribution of wealth it is restoration of justice.

I. Every practical worker knows that the first difficulty in dealing with pauperism is to find continuous and profitable employment for the poor. For profitable employment, three things are necessary ; encouragement to work, profitable work to be done, and a proper place to live while doing it. Our present system of taxation militates against all these conditions. Taxes laid upon personal property tend to discourage the production of it—as the dog tax was, in fact, intended to lessen the number of dogs. They lessen the amount of work and they so crowd the cities as to make moral and physical health impossible.

We must not discourage the production of wealth, if we are to alleviate poverty.

Now, all wealth, and even capital, comes from labor exercised upon land or upon other natural opportunities, and as the resources of nature are practically a fixed quantity, any increase of wealth must come from labor. All economists are agreed that taxes upon raw materials, or upon labor, are charged over, and charged over with a profit, to the consumers of the goods produced. It is evident; and for this we have the authority of all political economists, that all the taxes must eventually fall upon the source of wealth.

Nor are these taxes an insignificant factor. A saving of a hundred dollars of taxes per year will make a farmer's familyrich and independent at the end of forty years. The little burden is heavy for the little man.

The pressing difficulty in dealing with poverty is scarcity of work, and since only labor and land are necessary for work, and both are present, we must look for the reason why one is not applied to the other. To begin with land—it is not that the earth is not big enough. It is calculated that Europe has a population of but one to every seven acre's ; North and South America, one to eighty acres; and even Asia but one man to about thirteen acres. It is not that the earth is all used, but that, in addition to the necessary rent, or interest on its cost, agricultural land will not ordinarily yield any taxes whatever, and leave the worker more than a bare living. Nor is the field alluring to labor. At the best, the life of a farmer is an unattractive one. There is no eight-hour day for him. His work is from sun to sun, and his wife's work is proverbially never done. His situation is isolated. He is largely cut off from society, and it is not possible, at the average wages of a farm laborer—not over twenty dollars a month and his own board during eight months of the year—that he should support even a small family and make any saving at all. This it is that leads to the overcrowding of the cities. This it is that brings a continual stream of the most energetic into our great centres of population, and this stream, notwithstanding all our damming and bailing out, will continue to overflow us until we relieve the farmer from taxes upon what he produces and upon what he consumes, and make it possible for him to accumulate a competence.

But, it may be said that were the life made ever so profitable and attractive, we could not all be farmers. We do not need to be; farming is but one form of rustic work. There is stone breaking, sand digging, wood cutting, coal mining, barn building, excavating, filling in, lime and charcoal burning, marl mining, sheep keeping, stone cutting, quarrying, brick making, seaweed gathering, oyster catching, fishing, clam digging. ar>d you can think of a thousand other occupations using nothing but bare land, which, were they only unimpeded by taxes and restrictions, would drain off a portion of our ,urban population. Such a drain would raise wages, and, strange as it may appear, raise them without increasing the •cost of living. For the law of wages is this: Ten jobs and •eleven men brings down the wages by competition ; eleven jobs and ten laborers raises wages by the same rule. But an increased production will also reduce the price of commodities.

II. The great problem then is to check the increase of population in the cities, which makes morality and decency almost impossible. As long as that exists charities cannot do their full work, nor do it effectively. We may establish numberless fresh air funds, yet the children continue to live and die like rats in a sewer. If they do revive some of the little ones and bring fresh life and health for a year, what is its effect? Still further to increase population in the cities, to make work still scarcer and bread still dearer. We may take them permanently to the country; others are born and live to take their places. It is draining a sea ; such measures can reach, at best, but a small portion of the population. It is said that the Tribune Fresh Air Fund lias taken more than eighty thousand children out for two weeks each in the last five years. Suppose the other funds have done as much ; what is it? One in three dies in spite of all this ; if their deaths were all, we might pass it over; but think of the slow tortures of the mother who watches; who knows that good air and food are the only medicines needed, but that they cannot be had. Think of the children who do not die ; who live—cripples, scrofulous, stunted, miserable, unclean, vicious ; the results of overcrowding. We may build model tenements, but we only make city life more attractive and induce still further overcrowding. We may pull down old rookeries, but the people in them must still further overcrowd the adjoining houses. We may furnish free eating houses and coffee houses; we may have soup kitchens and various means of relief, but, as long as we have the glut of the city labor market, we but make living cheaper and enable the workman to offer his services in competition for what will afford him a bare and degrading means of keeping body,and soul together. Nay, we bring in more people willing to work, to marry and raise up children, or, God help them, to raise up children without marrying ; because when work or wages fail, they have the soup kitchens. For where there are more workers than can be employed, they must bid against each other for the work, and clearly they will get the job who can exist upon the least pay.

We cannot shut our eyes to these things by thinking of charity. The lines of charity run close to the lines of sociology. Prisons should be well conducted and prisoners treated humanely; that is political reform. The prisoner should be taken care of when he leaves, and given work ; that is charity. Women should not be barred from the privileges and wages of men; that is politics. But to set women to compete with the wages of men in an overstocked labor market piles yet harder work upon the hands of charity. That is economics. One thing affects the other. When we make foolish laws we find that we have to provide hospitals, dispensaries, asylums, homes, refuges, meals free, and at an enormous expense, and all to do those things which men would do of themselves and do under healthier conditions, did we but let them alone and leave to them the sums which we now take from them in taxes, direct and indirect.

We must remit the fines for giving work; fines which we call taxes on productive capital. We must remit the fines for doing work; fines which we call the farmers' taxes. Remit all the taxes on personal property, which only the farmer pays—pays because he cannot hide his cattle, or machines, or crops—but which are a mere threat to the owner of notes, or bonds, or diamonds. Raise the revenues by taxing real estate, which is very valuable in the cities and of little worth in the country. Tax only what everybody uses, what all can see, what anyone can value. If we would keep people away from the towns, we must make life in the country less burdensome, and work in the country more remunerative.

III. This is no socialistic scheme. It is not proposed to abolish all poverty by a reform which consists in ceasing to tax the very poorest out of the small margin which they might otherwise save. Nor is it a plan to do away with competition. Competition, with its great rewards and fearful punishments, which make men do their best, is necessary and inevitable. Harsh as the law of the survival of the fittest may appear, it is a law. Much, however, of involuntary poverty is the result of unwise and cramping legislation. It is this which, not by making new laws, but by doing away with old ones, we may hope to alleviate.

Many will not agree to this, thinking that education is the sovereign remedy; so it is in the long run; but, for the present, education but makes a less contented man or a more dangerous criminal.

Many religious persons think that nothing but the Gospel will help; that all poverty is due to original sin; that God's grace is the sole relief. And this seems to be the view taken in the Pope's recent Encyclical on Labor. If that be true, we should refrain entirely from charities, lest we seem to war with God. But the hearts of the people give a truer answer; we must work with God ; we must deny ourselves and practise charity, and do it intelligently. When we see a wretched beggar it is easy to give him a penny to still our own conscience and to go away with a false and degrading sense of virtue. We have, however, done no good. Our duty is to look him up, to look after him, even to expose him if necessary. But to many of us that is impracticable. We must then organize in such a way that we can get it done for us and attack the roots of the evil.

Bolton Hall.

  • Bolton Hall, “The Effect of Taxation on Pauperism,” The Charities Review 1, no. 3 (January 1892): 115-121.