The larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment. When the total tax burden grows beyond a bearable size, the problem of devising taxes that will not discourage and disrupt production becomes insoluble.

All subsidy measures, all schemes to redistribute income or to force Peter to support Paul, are one-eyed as well as shortsighted. They get their immediate appeal by focusing attention on the alleged needs of some particular group of intended beneficiaries. But the inevitable victims - those who are going to be asked to pay for the new handout in increased taxes (which directly or indirectly means almost everybody else) - are left out of account. Only one-half of the problem has been seen. The cost of the proposed solution has been overlooked.

Competition always tends to bring about the most economical and efficient method of production. Those who are most successful in this competition will acquire more capital to increase their production still further; those who are least successful will be forced out of the field. So capitalist production tends constantly to be drawn into the hands of the most efficient.

A vital function of the free market is to penalize inefficiency and misjudgment and to reward efficiency and good judgment. By distorting economic calculations and creating illusory profits, inflation will destroy this function.

The real solution to the problem of poverty consists in finding how to increase the employment and earning power of the poor.

There is no more certain way to deter employment than to harass and penalize employers.

Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water.