50 HOW TO PAY FOR THE WAR

When general principles have been establishedfor the management of blocked deposits, theremay be other good opportunities for the use ofthis device. In particular, men on active servicemight have their economic position made a littlemore equal to the position of those remainingin civilian employment by being credited withan appropriate blocked deposit proportional totheir length of service. A "veteran's bonus" isa peculiarly fit obligation for discharge by acapital levy on wealth.

The device might also be useful for dealingwith excess profits. A counsel of perfection wouldrequire that no excess profits should be allowedduring the war. This is not advisable in practicebecause it would deprive those, who would never-theless remain in control of their businesses, ofany incentive towards economy; and the experi-ence of the last war showed that this is liable tolead to great extravagance and waste. It is inthe interest of the Treasury that the gross figureof excess profits before deduction of tax shouldbe as large as possible; and this will not beattained if those in charge of business are de-prived of all incentive. The existing tax onexcess profits is at the rate of 60 per cent whichmeans that, including income tax, 75 per centalready accrues to the Treasury and even alarger percentage in the case of surtax payers.If the basis of calculation was rendered moreequitable so that what legally reckons as excessprofits really are so in fact, there would be roomfor a moderate increase. But it might be a