Taxation

munal; the United States, 505 million dollars Federal, 189 State, 706 local (total 1,400). In 1913-14, the figures were : United 'For the Paris agreement of 1929 see REPARATIONS. (En. E.B.) Kingdom 163 millions national, 934 local; France 4,134 million francs national, 943 millions local; Germany 1,96o million marks Imperial, 1,140 State and 1,378 communal (total 4,478 millions) ; United States 661 million dollars Federal, 304 million State and 1,155 local (total 2,18o). After the war (1924) United Kingdom 718 millions sterling national, 25o millions local; France 22 mil liards national, 21 milliards local; Germany in 1922 before the complete currency collapse, 447 milliards Imperial and about 200 milliards local; United States 3,355 million dollars Federal, 4,475 State and local, total about 7,83o. (See Seligman: Studies in Public Finance P. 34.) These figures serve to show the great changes that have taken place in the relative positions of local and central taxation.

International Comparisons.

It is notoriously difficult to make statistical comparisons of the taxation burdens in different countries, so great are the differences in fiscal practices, but the following represents a very broad attempt (based upon figures before the Royal Statistical Society) :— In France tax rates were subsequently increased and the per centage ratio brought nearer to the English. In Germany the estimate of national incomes was not very reliable, but the figure has been reckoned at 20 per cent. The yield of the taxes levied by the Great Powers in Europe thus represents about one-fifth of their national income.

In the United States the ratio between taxation and national income has recently been calculated at 1 o.5%, which is less than the pre-war charge in England, France, Austria and Hungary. There is probably no country in Europe in which the taxation is at present as low as in the United States.

But the computations of a more experienced American writer, Professor Seligman, are rather different. He reaches the following results, as the ratio of taxation to income per capita:— "The far higher taxation in France carried through in 1925 and the gradual reduction in Great Britain" are reversing the relative positions of the two countries, and it is possible that in the near future "the most severe tax burdens in Europe will be suffered almost equally by France and Germany. . . ." (Studies in Public Finance 1925, I. Corporation Tax Burdens, p. 43.) The European Burden.—Why is it that taxation in Europe amounts to such a large proportion of the national income? The reason is twofold: (a) State expenditure is still high; (b) the national income has not yet reached the pre-war level. "If we analyse expenditure, we find that in most countries debt service has risen enormously, and that certain terminal charges, such as war pensions and reconstruction outlay weigh heavily on the budgets ; but that, on the other hand, appropriations for civil administrations and defence on the basis of pre-war prices are generally lower than in 1913." (Per Jacobsson in Europa Year

Book 1926.) The Colwyn Committee on Taxation reported—that in reference to the post-war period up to the end of the last com pleted tax year, it could be said definitely that the burden of taxation was heavier in Great Britain than in any other European country, and very much heavier than in the United States.

It is small wonder, therefore, that taxation has come to be a dominant factor in economic life, although its importance in actually altering the standard of life, and reducing production and initiative can easily be exaggerated. The Colwyn Committee on Taxation reported that the burden of indirect taxation ap peared formidable when viewed as a whole, but on analysis, it was found that the duties on food were now light except for the sugar duty, which they considered relatively high. The high level of the duties on luxuries appeared to be justifiable at present, considering the large amount of revenue required, and the risk of interfering too much with savings, if heavier direct taxation were adopted.

"The burden of direct taxation, while we do not wish to belittle it, is less crushing than is frequently represented. It does not, with trivial exceptions, enter directly into prices, and its indirect effects are not such as substantially to affect the general price level." It has a materially adverse influence on capital accumu lation, but this does not hold good, so far as the receipts are applied to payments on account of the internal debt. Again, it has widely diffused psychological effects, and has been responsible for a good deal of discouragement, while trade has been suffering from long-drawn-out depression due to wider causes ; on the other hand, some of the psychological effects have been actually bene ficial. The Colwyn Committee said that present taxation—even in conjunction with the loss of material wealth due to war expendi ture, which lies behind the national debt—was not one of the main causes of industrial difficulty. (J. S.) For details of the taxation systems of different countries see the articles under GREAT BRITAIN, UNITED STATES, FRANCE, GER MANY, etc.

BIBLIOGRAPHY.-Sir Josiah Stamp, British Incomes and Property (1922) ; Fundamental Principles of Taxation (1921) ; Wealth and Taxable Capacity (1922) ; Current Problems in Finance (1926) ; Prof. Pigou, Public Finance; G. F. Shirras, Science of Public Finance (1924) ; E. R. A. Seligman, Shifting and Incidence of Taxation (1921) ; Income Tax (1914) ; Essays in Taxation (1925) ; Report of Royal Commission on the Income Tax (592o) ; Report of the "Colwyn" Committee on Taxation and the National Debt (1927).