48 HOW TO PAY FOR THE WAR

war continues for two years or longer, the NationalDebt will reach an unmanageable figure, whichwill hamper national finance for years to come.In such circumstances a Capital Levy will beadvisable just as (in my opinion) it was at theend of the last war, if it could have been carriedout before the post-war slump. There may be agood case, therefore, for linking a Capital Levy (or tax) to the Deferred Pay.

I suggest, therefore, that an undertaking shouldbe given that a Capital Levy will be enforced afterthe war to bring in an amount sufficient to dis-charge the liability in respect of Deferred Pay.I should still argue that it would be better notto synchronise the two. I would not willinglyforego the great advantages of withholding thedeferred pay until the onset of serious unemploy-ment, whereas this would be the worst possibletime for the Capital Levy. If the Levy is to bepaid in a lump sum, it should be discharged atthe earliest possible date after the close of thewar, especially if temporary boom conditions seemimminent. But it might be preferable, as facilitat-ing collection and greatly lessening the disturb-ance, to collect it in a series of instalments overa period. This procedure would have the specialmerit that it might pave the way administrativelyfor a permanent capital tax which would be avaluable addition to our fiscal machinery and hascertain important advantages over income tax.In any case there will be plenty of Treasury Billsafter the war waiting to be cared for, so thatthere is no technical reason why the Capital Levy