Paisley humanitarian. "If I could only be quite sure that I shouldn't be discouraging him from saving."
"Mr. Asquith has pronounced himself cautiously in favour of a capital levy, on the condition, amongst others, that it must not be allowed to discourage the habit of saving." Cartoon from Punch magazine (February 11, 1920), illustrating part of the dilemma for governments pondering the use of a capital levy.
A capital levy is a tax on capital rather than income, collected once, rather than repeatedly (regular collection would make it a wealth tax). For example, a capital levy of 30% will see an individual or business with a net worth of $100,000 pay a one-off sum of $30,000, regardless of income. Capital levies are considered difficult for a government to implement.[citation needed]
Some economists argue that capital levies are a disincentive to savings and investment, and cause capital flight, but others argue that in theory this need not be the case.[citation needed] The latter view was popular in the World Wars; in the 2010s, it has also gained some acceptance as more heavily indebted nations struggle to raise revenues.