XVll
the other states of the German Empire have adopted, in this connexion, very
much the same system as Prussia, it will suffice to indicate in detail only the
methods adopted in that country. There the principal sources of municipal
revenue—other than the proceeds of municipal enterprise—are the income tax,
the land and building tax, the trade or occupation tax (Gewerbesteuer), and
the tax levied on the sale of real estate ; the first three of these are general, and
the last is rapidly coming into favour. Other taxes of secondary importance
are levied upon dogs, upon entertainments, and upon beer in the form of a consumption
tax ; but these are not universal. Several towns have of recent years
adopted an “ increased value ” or " unearned increment ” tax. But the income
tax remains the most important source of revenue, and it is the only direct tax
which falls everywhere upon the working classes, since it is payable by all citizecs
in receipt of more than a specified income, whether they are householders or not.
The municipal income tax is a percentage of the State Income Tax, varying
from town to town and from year to year according to local needs, and is based
on the assessment made for the state. The State Income Tax, as fixed by a law
of the year 1891, falls on all incomes, whatever their source, exceeding
900 marks, or £45 a year, and is levied according to a sliding scale of which
the first ten stages are shown in the following Table :—
Annual Income.
Over £45
„ £52 10s.
» £60
„ £67 10s.
,, £75
„ £82 10s.
» £90
„ £105
,, £120
„ £135
to £52 10s. inclusive
„ £60
„ £67 10s. „
„ £75
,, £82
„ £90
„ £105
„ £120
„ £135
„ £150
Annual State
Income Tax.
£ s.
0 6
0 9
0 12
0 16
1
6
11
16
2
12
The tax is thus progressive, amounting to 0 66 per cent, on the lowest
incomes and rising gradually to T7 per cent, on £150. It then rises gradually
to 3 per cent, on incomes of £500, and to a maximum of 4 per cent, on incomes
of over £5,000.
Assessment is by “ households,” that is, the incomes of husband, wife,
children and other dependents are added together and taxed on the total ; but
the incomes of wives living permanently apart from their husbands are assessed
separately, as are also such incomes of children and other members of the
household as are not at the disposal of the head of the household. Certain
deductions are made before the taxable income is arrived at, chiefly of contributions
to sickness, accident and old age insurance, and to widows’, orphans’ and
pension funds, and life insurance premiums up to £30. Further, in the case of
incomes not exceeding £.150, £2 10s. is exempted from taxation for every
member of the family under 14 years of age not assessed independently, and
where there are three or more such persons in a household there* must be a
reduction by at least one group in the schedule of income groups. In the case
of income not exceeding £475, extraordinary obligations in regard to the
support and education of children and relatives, chronic sickness, debt or other
misfortunes may justify a reduction by at most three groups.
The percentage addition to the State Income Tax levied by the local authorities
in Prussia varies considerably. In Berlin it has been for some years 100 per
cent., but elsewhere it is generally much higher ; at the date of the Board of
Trade Enquiry it was 135 per cent, at Aachen and 136 per cent, at Breslau, whilst
in Bochum it was 160 per cent., in Barmen, Elberfeld, Essen, Dortmund and
Königsberg 200 per cent., in Solingen 215 per cent., and in Remscheid
230 per cent. Taking 150 per cent, as a normal amount, a workman whose net
income (i.e., after the above-specified deductions had been made), either alone
or with his family, was 30s. a week would pay (as having an income of between
£75 and £82 10s.) a total income tax of £2 12s. 6c?., viz., £l Is. to the State,
29088 e
