Note 746 — APPENDIXES

E.g. "Many definitions of the word 'tax' have been proposed, but I know of none which would include just so much of the Post Office revenue as happens to be in excess of the amount expended in the year and no more.

"I believe that the desire to reckon this amount and no more as a tax, arises from a somewhat dim impression that it is the sum which the State exacts in excess of what a private company, without any legal or natural monopoly, would have to be satisfied with for performing the same services. But it is not. In the first place, such a private company would expect and receive about 3 per cent. on its capital in addition to the mere working expenses. We do not know what the capital of the Post Office is, but it must be very great, seeing that all the more important offices are owned in fee simple. Secondly, a company would raise new capital for new buildings and the purchase of more land, instead of defraying the expense as if it were current working expenditure. Thirdly, a company would not 'encourage thrift' by giving away upwards of £700,000 a year to the depositors in the savings bank, by paying 2½ per cent. Fourthly, in all sorts of ways the Post Office is not conducted as a commercial enterprise would be. For example, it spends more than a company would do in the less profitable districts.

"The only argument I know of in favour of treating the so-called 'net revenue' alone as a tax, thus breaks down. If any part of the gross revenue is a tax, the whole must be."—E. Cannan (Memoranda on Classification and Incidence, p. 163).