El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-23

] ~ II
W With so odd countries already
having adopted the income
/ tax as part Of their permanent sys-
/ TEN Of taxation, it is interesting to
/ note that in the past quarter of a
I century no nation that has adopted
Sucn a tax has repealed it. Ten Of these
countries have national as well as To-
OF the enactment of such laws is 1881,
/ allhough large majority Of the cOun-
] tries enacted their laws in the '90s.
! Average Rate is Four Percent.
/ Inc reason the average goes back
| so Tar IS that some few of the COun-
| tries had laws many decades ago. TAX
I ing 20 countries for averages, it is
/ found that the average rate is about
percent, that one person out Of so pays
| IIe laA, ana that counting the Iaml-
lles OF iIneSe taxpayers, about one per
! son IN 10 is affected by ii. When the
| United states had its civil war income
I tax law in force, the exemption was
placed at $1,000 during the years be-
| tween 1867 and 1870, and yet only one
! person out Of each $50 had to pay the
/ tax.
Australia Furnishes Guide.
/ In looking for guiding lights in gov
I ernmental matters the eve of the stu
dent nearly always turns to Australia
and New Zealand, for there one finds
much of the worlds pioneer progress
slve legislation. The income tax laws
/ OF these countries are no exception
Iney are characterized by high eXemp-
Z tlOns, liberal graduatOns, and sharp
| differentiation between labOr-prOduced
| and capital produced incomes. When
/ the English committee was investigat-
I ing such matters in 1906, it called in
T. NJ COghlan, who had helped frame
} these AntipOdean laws. Among other
Things ne dld was to furnish an estl-
mate Of whta the New South Wales
land tax and income tax would bring
I in in the way Of revenues
In the London inquiry he testified
that he had estimated correctly to
within less than . percent. His JeSt1-
mOny was to the effect that the laws
I have worked well IN practice, and that
practically every contrary prediction
has been discounted For instance,
when it was proposed to tax capital
/ produced income more heavily than
I labor produced income, il was widely
predicted that the effect would be TO
drive capital out of the country He
testified that no such effect has been
Labor Produced Incomes.
Labor produced, or earned incomes,
I are there called personal exertion' in
comes 1t was feared that there would
{ be q great difficulty In DISTINGUISHING
between capital produced and labor
produced incomes where a man man
ages the business in which his capital
is invested They get around this rath-
er neatly, as the way the farmers are
assessed will show. The part OF the
income which arises from the land is
considered as the equivalent OF the in
terest on thee capital invested in the
land. and the remainder Of the income
is supposed TO arise from the personal
eXertiOns" OF the farmer.
In Victoria the exemption is 1878 For
the first S2433 above that the tax is a
little less than IL percent, and this
increases with each successive increase
OF income until IL reaches its maxi
mum of about percent on all incomes
above $4,000. Incomes from property
are taxed at double rates
Rates Vary in Austria
In Austria Coming back TO EurOpe)
there is a tax on general earnings
tax on corporate earnings, and a gen
eral income and salary tax The rates
vary, but go as nigh as 10 percent
There is a provision which authorizes
the government 10 enter into income
tax reciprocity treaties with other
double taxation Of incomes between ma
tons Under this provision Germany
and Austria have entered into such a.
treaty whereby income from land is to
be assessed only where the land is
situated, and income from personal
property only in the land of actual
domiclle- This is probably the first
such treaty in the history OF the in
come tax Taxable income is declared
TO be the sum Of all revenues in money
or In moneys worth to the individ-
ual. including the rental value Of his
house and the prOFender his family con-
sumes- Gifts and inheritances are not
considered as income and reasonable
life insurance premiums may be de-
Quoted from the gross income.
Interest on Debts Is Deducted.
Interest on debts is also deducted.
There is an exemption of 200 crowns.
and no one with an income of less
than 1000 crowns is required to make
a report unless asked 10 do So Moneys
worth IS a good deal Of a poser for
the man who figures his income. Tech
nically it is held that the value of a
dinner given BY one official to another
is required to be included in income
There IS no provision as to secrecy
Tax lodging is punishable by fine Of
from two to nine times the tax
The Austrian law is generally pro-
nOunced as looking good on paper. but
being at least partial failure in praC-
tice It is estimated that tax lodging
IS so general that certainly not more
than half Of the taxable income is
reached. and UnG-- this may fall even
as low as a third. This is attributed
10 the fact that the sentiment Of the
people is too everlastinEly against the
tax to permit Of its efficient enforce /
ment-
ItaIy's Tax Rate is High.
Italy has an income tax law that
embOdies the features of stoppaEe at
the source and differentiation. but the
rates levied are very high, so high in
fact that the administration OF the
law has largely broken down in the
face OF theIt. The Italian rate is from
four 10 ten times as high as the rates
in England and Germany, and vet the
yield is only a third as great as that
OF England and half as great as that
OF Germany OF course these two cOun-
tries are richer than italy. and land
incomes are not taxed 10 italy. but even
these things do not explain the great
Tax lodging is almost universal The
people regard the law as the code OF
financial torture One writer says
the Italian taxpayer is the most pa
tient human animal known to fiscal
history, yet even he cannot stand the
burdens of the income tax.
Many Italians Dodge Tax.
The tax goes even as high as l. and
90 percent, and of course the people
dodge it. The worst dodgers are said
to be professional men, and OF the.l az
has been said that the diversities and
fluctuations of their consciences attain
q degree of refinement of which only
the higher talents are capable P-b-
LEFTY was tried as a cure for dOdEiuE.
and il failed. It has been said that the
only thing that would surprise an Ital-
ian would be to find that his nei.yhhOr
had returned his true income. or had
been assessed in any degree comparable
thereto
The Italian tax is collected in a most
peculiar way. The government does
not undertake the collection itself. but
for each collection district submits the
privilege of collecting the tax TO pub
lie auction. and the person or firm or
company submitting the lowest bid and
proving the necessary responsibility is
awarded the contract. In the district
in which Rome is situated the lowest
bid ranges around / Z percent OF the
taxes collected
Holland EEcmpts Incomes of 1921.
Holland has an income tax law for