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322. The development of the Swiss taxes is noteworthy as a counterpart to the development of the income tax in all

other states.'

As the demands on the state and commune (poor relief, schools, roads, railway subsidies) continued irresistibly to increase, there supervened in the Swiss cantons a condition of things in which, on the one hand, the basis for an adequate development of a system of taxes on consumption was lacking (in part a purely administrative shortcoming), while on the other hand, the force of the democratic current, with its favorite views of taxation, was such as to sweep all considerations out of the way. The questions of equity, as well as the questions of expediency, that centred about the increase of the property and income tax during the last generation, were easily answered in a case where circumstances put the shaping of constitutions and laws into the hands of a majority possessed of little or no property.

Characteristic features in this peculiarly Swiss development are, apart from the high rate of the tax absolutely considered, the strong ratio of progression, the marked exemption of small personal incomes, the preponderant taxation of incomes from property (especially for communal purposes) as contrasted with personal incomes. But there is also another characteristic fea

ture, which is likewise an outcome of democratic institutions, which does not stand out in contrast with the arrangements in other states, but is very similar to them. This is the method of assessment. On this head it is to be remarked that democracy has not yet nearly reached the logical result of its method of taxation, that is to say, democracy is still to an extent a civil democracy, and not as yet a social democracy. If it had reached the ultimate stage of its development then its assessment machinery which lies entirely in the hands of the

The somewhat legendary conceptions that have prevailed on the subject of the property tax in American states and cities have been subjected to a sobering process through Richard T. Ely's Taxation in American States and Cities (New York, 1888). Cf. also a paper by the present writer in the Political Science Quarterly, vol. iv. March, 1889. On Swiss Taxation cf. Georg Schanz, Die Steuern der Schweiz (5 vols., 1890).

communal officials, in conformity with the principles of democratic self-government, would reflect the same social contrast which is shown in the legislation on the rate and progression. of the tax. For the time being, this is not the case; for the time, property relations have not yet been sufficiently differentiated for such a result; the extreme dangers of democracy have so far been staved off by the preponderance of the middle class.

Hence we find an application of the taxation of property and income calculated to show up the dark side of any system of assessment of equals by equals; it has disclosed the existence of such a dark side to an extent that is possible only in a case where the individual and the state are so directly and immediately in contact with one another as here. Among the consequences of this management has been a moderation in demands made by the law, of such a character as to make up for much of the apparent hardship involved in the law; but this has been done in a perverse and inequitable fashion. While this Swiss method of self-government as applied to taxation is very suggestive as compared with the experiences of Prussia, it affords a particularly instructive contrast to the carefully planned method of assessment in use under English self-govern

ment.

323. The Swiss taxes on income stand in the sharpest contrast to the great democratic state of France, and its system of

taxation.

It has already been remarked in another place that the influence of democratic ideas, even when a favorable ground is afforded by a radical constitution, will work out very different results in a large political and social organism from those seen in small democratic republics, such as those of Switzerland. It is, relatively, such a long and intricate way from the individual to the whole; further, the preponderance of the historical forces which continue to govern the state under any and all changes of constitutional forms, the ascendancy of the proper

tied classes, the frequently decisive influence of the capital,these are breakwaters opposed to the currents of democracy.

There has, of course, been no lack of incitement to the domestication of the income tax in France also. But none of the attempts made have so far led to any result, not even the legitimate result which ought to be attained by this class of tax in a modern system of taxation, still less the extravagant outcome proper to a triumphant radicalism.

In 1848, Goudcheaux, the Minister of Finance, submitted a project to raise 60 million francs by means of a repartitioned income tax, to be distributed upon the departments and communes and levied by communal assessment upon the individual taxpayers. A committee of the national assembly, whose chairman was Parieu, altered this project essentially, especially by introducing certain bureaucratic features in order to perfect the mechanism of assessment, but when Parieu presently succeeded to the Ministry of Finance, he withdrew this project, and substituted another in 1849, which was to tax all incomes at the rate of 1 per cent., the assessment being based on returns made by the taxpayers under the supervision of a communal commission, to consist of the mayor, a citizen selected by the prefect and the comptroller of the direct taxes. This project

was also presently withdrawn, Fould having succeeded Parieu in the Ministry of Finance.

Since that time proposals of the same nature have frequently (1855, 1862, 1863, 1871, 1872, and later) been made by various deputies, but the government has invariably opposed the measures from apprehension of the unpopularity of any income tax. With the shifting of the majority of the Chambers over towards the left, the idea has again suggested itself to the ministries that have lately succeeded one another. Gambetta included the income tax in his programme, very much as he did so many other reforms which were intrinsically desirable, but practically

Paul Leroy-Beaulieu, Traité de la science des finances, vol. i. pp. 466-470.

2 The indispensability of these bureaucratic elements is insisted on by Leroy-Beaulieu, vol. i. 470.

impossible. Very lately (October 30, 1888) the Minister of Finance, Peytral, submitted the draught of a bill' for a general income tax, which has shared the fate of others-being forgotten in the rapid succession of ministries.

The antipathy of the propertied and cultured classes, even of experts, in France, to this tax is well illustrated by the position of Leroy-Beaulieu. In his Science des Finances (1877) he advocates the adoption of the income tax as an indispensable corrective to other, especially indirect taxes, as being in a peculiar degree calculated to reach the well-to-do and the wealthy classes, but he offers the criticism on Peytral's proposed law, that an income tax would be inequitable in France for the reason that the upper and middle classes already "contribute more than their proportionate share of the public burdens" under the taxes now existing. A further illustration to the same effect is afforded by the fact that while G. de Molinari, the editor of the Journal des Économistes, opposes this view of Leroy-Beaulieu's, he offers the very characteristic objection that the upper and middle classes, who, after all, continue to exercise a predominant influence in the state, are fairly unanimous in rejecting the income tax, and that, moreover, with the country broken up into factions as it is, it would be impossible to find honest assessors.

Cf. the report and the text of the bill in the Journal des Économistes, November 1888, pp. 239 et seq. Peytral's report contains a review of similar attempts that have been made since 1848, especially those made under the Third Republic.

2 Journal des Économistes, November, 1888, pp. 309 et seq.

CHAPTER IV.

THE TAX SYSTEM.

LITERATURE. Adolph Wagner, Finanzwissenschaft, Zweiter Theil (1880); Allgemeine Steuerlehre, Dritter Hauptabschnitt: Das Steuersystem und die Hauptarten der Steuern, pp. 362-565. Lorenz von Stein, Lehrbuch der Finanzwissenschaft (5th ed., 1885), Zweiter Theil, Erste Abtheilung, pp. 495-533. Karl von Hock, Die öffentlichen Abgaben und Schulden (1863), secs. 4, 13, 14. Fr. J. Neumann, Schwebende Finanzfragen, Erster Abschnitt: Die Unterscheidung direkter und indirekter Steuern" (Schmoller's Jahrbuch für Gesetzgebung, Verwaltung und Volkswirthschaft im Deutschen Reich, vol. i. 1882, pp. 945-976). Fr. J. Neumann, Die Steuer; Erster Band: Die Steuer und das öffentliche Interesse, eine Untersuchung über das Wesen der Steuer und die Gliederung der Staatsund Gemeinde-Einnahmen (1887). Albert Schaeffle, Die Grundsätze der Steuerpolitik und die schwebenden Finanzfragen Deutschlands und Oesterreichs (1880), pp. 51-198.

I. CONSPECTUS OF THE VARIOUS KINDS OF TAXES.

$324. A conspectus of the various kinds of taxes might be most simply and easily effected by means of an historical survey in which it is attempted to arrange the main facts of taxation in an orderly manner by groups, provided only that the historical material were of a nature to lend itself to this treatment by showing an orderly gradation of development from one kind of taxation to another. It would then be possible to trace some sort of necessary connection between certain stages of political development and certain forms of taxation, and to show that in accordance with well-known conceptions of the evolution of political, juridical and economic institutions, a gradual progress in forms of taxation has gone hand in hand with the gradual development of the state.

It is not only true that in the earlier treatment of tax systems a lively sense of the desirability of such a generalization

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