FINANCE IN THE PROLETARIAN STATE

been confiscated from the bourgeoisie; it had the cash resources of the late government; it had various sums which were secured by taxing the bourgeoisie, by the sale of goods confiscated from private traders and firms, etc. All these sources of income were small in relation to the necessary expenditure. As far as the local soviets were concerned, taxes levied upon the capitalists were for a considerable time their only source of revenue, but for the central government such taxes could not provide any notable means of support. Moreover, such a source of revenue was transient. The bourgeoisie was soon stripped bare; or else, and this is what usually happened, members of the bourgeois class vanished, after hiding their savings. A graduated income tax has not given and does not give satisfactory results. In so far as it is levied upon employees and workers, it is an absurdity, for the State is simply taking back in the form of a tax what it has paid in the form of salary or wages. In so far as it is levied upon the urban bourgeoisie, officially no bourgeois exist any longer. Legally the bourgeois cannot continue their former occupations. Such a tax, therefore, is extremely difficult to collect, and in actual experience this source of State revenue proved altogether inadequate. A graduated income tax might be far more lucrative when levied upon the rich peasants; but for its regular collection we should have to depend upon the work of local instruments of taxation, which would need to be organised by the local authorities, chiefly those of the rural districts. As far as the middle peasants are concerned, it is undesirable for political reasons to levy any tax upon them while the civil war continues, for such a measure would tend to alienate them from the proletariat. The attempt to raise an extraordinary revolutionary tax of ten milliards miscarried, for, after great efforts, less than two milliards were secured. The main source of revenue for the State has been the issue of paper money. This, in so far as the money is able to buy anything, is in reality a special form of taxation. Inasmuch as the issue of paper money accelerates the depreciation of the currency, it leads indirectly to the expropriation of the money capital of the bourgeoisie, for it reduces the purchasing