The principal basis of the local taxation systems of the coun tries of the continent of Europe is to be found in the addition, to certain of the national taxes, of so many hundredths for local purposes ("additional centimes"), the whole of the tax being col lected by the national authority and the produce of the "addi tional centimes" being paid over to the respective local authorities.
Thus, the demand note in respect of the land tax in France shows, in a specific instance, that 48% is what is called the "princi pal" (i.e., the amount levied for national purposes), that 40% consists of "additional centimes" for the purposes of the depart ment (which corresponds to the English county) and 1 2 % for the purposes of the commune, which is the minor local authority.
The number of centimes which may be added to any specific national tax by each type of local authority is definitely regulated by law—sometimes, as in France, by the annual finance act, some times for a period of years or until fresh regulations are laid down. The French national taxes to which centimes may be added for municipal purposes are the four "direct contributions" ("direct" taxes in the continental sense meaning taxes which are levied upon a person in consequence of his name being inscribed on a cadastre or register), viz., the land tax, the land and buildings tax, the tax on the rentals of houses and apartments, and the licence tax on trades and professions. In Germany, before the World War, the addition of centimes to the income tax was the main source of revenue to the communes. This is no longer permitted, the total yield from the income tax being now taken by the Reich, which refunds a certain proportion to the States and communes. The communes are still allowed to add percentages to the State taxes on land and buildings and on professions, in which the Reich has no part. In most of the other countries of Europe the same system is to be found to a greater or less extent.
In all European countries, the communes, whether or not they may add centimes to the national taxes, are given the power to levy certain taxes on their own account. Local taxes on land and buildings are very usual. So, too, is a dog or an entertainment tax. Other instances of local taxes are—in Belgium, on visitors, street facades, construction or reconstruction of buildings, sale of liquor and tobacco; in France, on dwellings and offices, horses, carriages and motor-cars, sports grounds, domestic servants, pianos and organs, billiard tables, clubs ; in Germany, on unearned increment, acquisition of land, musical instruments, sale of beer; in Switzerland, by way of bicycle, motor, hunting and fishing licences; in Czechoslovakia, on house rents, lodgers, vacant land, advertisements. In Estonia there are no less than 3o heads of
taxation which are open to the local authorities, and in Hungary the towns may levy taxes on any object which is not taxed by the State. In Spain, in addition to a number of local taxes of various kinds, a municipality may levy a general tax on every resident based on his financial condition. In spite, however, of the variety of local taxes of a miscellaneous character, their yield is every where a small proportion of the total revenue of the local authorities.
The levy of a local income tax is of greater importance and deserves special mention. The countries in which such a tax (independent of any national tax) forms one of the chief sources of revenue are Denmark, Finland, Holland, Norway, Sweden, and some of the cantons of Switzerland. In Holland, in 1924, there were only five communes which levied no kind of income tax for local purposes. In that year 6o communes added percentages to the national income tax, 85 levied a local non-progressive income tax, 3o9 levied a similar tax as well as adding percentages to the national tax, and 625 levied a local progressive income tax. The assessment of each taxpayer, in Holland, to the local income tax (if any) is fixed by State officials at the same time as that to the national income tax, and the tax is collected by State officials and paid over to the communes on a certificate by the minister of finance. Power can, however, be given by royal decree to a com mune, for a period of not more than five years, to deal with the local income tax through its own officials. It has already been mentioned that the power which the German communes formerly possessed of levying a local income tax by means of additions to the national tax has been taken from them. The system was, how ever, so complete until the changes made subsequently to the World War that reference should be made to it.