The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-08-18
FEW ESCAPE TAX
d. ON INCOMES in
OLDER LANDS
Proposed Exemption of $4,000
in United States is Compare
lively Large
IN AUTOCRATIC PRUSSIA
- NEARLY EVERYONE PAYS
Iuouisitorial Methods There Are
Made Possible BY Peoples Sub
mission to Bureaucracy

one OF the features OF the American
income taxation proposals Is the OK
emption OF incomes under $4,000 a
Year. The old argument that this IL
class taxation is raised.
The excuses given are that CD cor
lection or income taxation from small
salaries would require the creation oi
great and expensive machinery, max
ing such extension Of the tax unprofit'
able. and (2) that by such exemptions
there is worked an economic evening
'of the burden between the rich and
the not 80 rich, II not poor.
II seems certain, however, that as
years pass, and the constant demand
Tor more revenue continues. many or
those who are al first exempt Will
be brought under the operations OF
Inc tax. II there is an evening pro-
cess II Will be similar to that fea'
ture or the European income taxation
systems which. In a measure. has been
adopted In the American proposals.
that is. by increasing the tax rate on
heavy incomes.
IL Is necessary TO go to the Euro
pean mainland TO find systems which
ere more thoroughly democratic" in
that the income tax Is made to reach
the mass Of people-always assuming
that the mass Of people earn a living
wage.
There the exemptions are much
lower than the proposed $4,000 In the
United States, the exemption OF ST.
500 in New Zealand. $1,000 in New
South Wales and $500 In Great Brit
ain, The level OF income below which
taxation does not go in European
countries is $3.50 IN Austria, 1926 in
Spain, $2l4 In Prussia. from $240 down
10 $40 in the Swiss cantons, sll7 in
Wurtemburg and so on down TO SIS
In Saxe-Altenburg,
Says sydney Brooks. in the April
Worth American Review. Prussia,
with rate OF 81 per cent on SPA
rising to per cent on $4,000: Sax
cny with rate OF 20 per cent on 500
rising to s per cent on $4,000 and
over Austria with a rate OF per cent
on $3.50 rising TO 4 per cent on $40. 900,
Sweden with a rate OF per cent on
$4,000. Denmark with a minimum or
Ia per cent on $l95 and a maximum
OF 2.5 per cent on s27 500 and over
may all be quoted as examples that
depart widely from the British sys-
tenn This departure is both In re.
ducing the exemption and increasing
more systematically the progression
or graduation Of rate. Then he adds
If one were 10 go deeper into the
natter and note the innumerable
ways In which the income tax is dif-
terent!ated--in which, that Is TO say,
a different rate is levied on different
kinds Of income and in which unearn-
. Cd income Is taxed al higher rate
| than earned income. this article.
without touching at all on the In
! tricacies OF assessment and collection
would be we'll on the way TO becom-
lag volume"
II is noteworthy that the most In
teresting OF these "democratized" in
come tax systems Is that Of highly
autocratic Prussia. And the wide APP
plication there OF this kind OF taxa
ton is largely due TO autocratic meth
DDS which would not be successful Is
democratic country.
The Prussian income tax Is Of spe-
cial interest not only because It is so
generally applied. but because ii is
the most advanced type Of a system.
very different from the British which,
Indirectly, collects direct tax.
Though Prussia has begun to gather
some OF the tax al the source, its sys-
TEN is essentially one that directly
levles and collects direct tax.
Whereas. in Great Britain, rs per cent
Of the income tax is gathered before
the income reaches the person taxed
in Prussia. and generally through.
out the German states, practically all
collection is by direct means.
Peculiar conditions exist in Prussia
and over almost all Germany, when
makes possible the use Of methods
mere that would not be successful In
the United States. The Germans not
only have drilled into them a greater
respect and understanding for discip-
line, but are trained TO accept auto
cratic and bureaucratic rule
4. The Prussian income tax system
vas enacted In 1891 II Is not neces-
sary TO go back further than TO 1884
for the inception Of the present sys-
TEN in the early income laws enacted
and later developed by Saxony. Here
was the beginning, also, in the Ger
man states. OF the principle OF obi-
gatory self-valuation. Baden. begin.
ming In lS4s, and other component
parts Of the present Germany, elabor-
ated on this and finally, In 1891, Prus.
put that commanding part OF the EN-.
pire "as far In the lead as she had
hitherto been In the rear"
The income and certain other minor
taxes supplanted entirely the old tax
alton or produce"--that is. the land
tax. the building tax. the business tax
az well as an old tax on mines. All
these were discontinued as state
taxes.
The Prussian income tax applies on
incomes OF 900 marks ($2l4l and the
tax rises by regular system OF pro-
aression.
An Interesting distinctive feature
or the Prussian system Is Supple.
fnentary tax" OF about one-twentieth
or ! per cent OF the assessed valua.
ZION or property. This strange tax is
hanuled as part OF the income tax.
and valuation is estimated from the
income return from the property
us purpose Is TO direrentiate
between unearned and earned I'm.
come. thus placing strange. I'm,
highly effective. supertax on so.called
unearned income.
There are various Attachments from
these schedules OF rates Among
chem are Attachments for children and
dependents on the family tba abatoI