El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-20

German empire, when are not
national, but rather state laws are
built up on an entirely different the
lory of collection than those Of Eng
land and some other countries In Eng
land the very thought Of inqulsltorial
( methods is repugnant, and the govern
ment tries 70 collect the taxes with as
I 1ftfIa resort to these methods as is
possible: therefore, wherever II IS pos
: sibIe the tax is collected before the
I income reaches the taxpayer In Ger
/ r0aDv- the states feel that they have a
{ right to know the affairs OF every sub
! iect and consequently make no effort
I TO avoid the inquisitorlaI process OF
Create Tax Districts.
! The several German states each has
/ its own laws but they mainly follow
4 the Prussian law both as to the amount
4 of the tax and as to the method Of its
collection. In each tax district there
, is an assessment commission made up
| of a majority elected by the voters Of
! the district and a minority appointed
| bv the government. But this minority
/ includes a chairman, ana his duties
/ and powers are such that the elected
! members are often somewhat more or
namentaI than powerful in the work
This bodv receives the returns from
I the taxpayers, and has the power to
call them or anyone else before II to
testify as to the income OF a taxpayer.
l II may ask for books and papers
vouchers and other data and 1t is en-
powered to fix its own assessments
where it thinks proper. This has re-
suited in a bureaucracy so powerful
that most commentators agree that
no other country would tolerate it. But
in a uniform and well disciplined, the
people are meek in the presence Of
officialdom, and tolerate a degree OF
espionage that would not be borne in
England or the United States
Law Amended In 1891.
The present Prussian law. together
modelled after ii, dates from 1891. IN
that year the entire tax system Of
Prussia was OVerhauled, and not only
was an income tax law enacted. but
law was passed creating a supplement-
airy property tax, which results in in
come derived from property paying a
higher rate than income derived from
labor There was great and widespread
objection to some OF its features when
IL came TO be administered, and this
resulted in a revision in 1906. One Of
the amendments of this revision pro-
vides that cooperative buying and sell
ing associations are TO be taxed. they
We're exempted under the law Of 1891
Another amendment provided more
minute directions for determining the
net, or taxable income, and permits the
taxpayer to deduct from his gross in
come as a part Of his reasonable ex-
penSeS, his other taxes, his cOntrlDu-
tiOns to compulsory labor insurance
funds, the insurance premiums he pays
for his children, and sinking funds for
the Wiping out Of mortgages
Still another amendment abolished
the distinction between fixed and IN
certain incomes, and substituted a rule
whereby the year Just closing IS con-
sidered the period for determining the
amount of income wherever complete
records are not kept Where careful
bookkeeping is practiced the average
I for three years is taken, and the losses
I Of one year may be deducted from the
profits Of another year.
Household Incomes.
/ Under the unamended law a house
7 nolders income was calculated as N
Guiding the earnings Of those depend
ent upon him, but as amended only
Z the earnings Of the wife may be in
/ Guided with that Of her husband. IN
der the former practice, where a man
had five minor children and they
worked for a living, their income had
to be reckOned as a part Of the fathers
income, so they were taxed, whereas
a son who had attained his majority
might escape taxation
The revised law goes still further
in its efforts 10 aid families having
children and other dependents 1t gives
an abatement of so marks for each
! such dependent, and the taxpayer IS
given a still further reduction where
there are three children in the family,
and this is doubled where there are five
children.
This provision with reference to chill
dren and dependents was still further
liberaliZed in 1909, so that the abate-
ments grow even more rapidly as the
size OF the family grows At this later
revision, the rates Of the income tax
were increased for a period OF three
years. according to the authorities
although there is reason to believe that
/ the increase will be permanent. The
increase of the rates for individuals
ranged from to p. percent; for linn
tied liability companies from Z u to 45
percent: and for stock companies from
10 to so percent.
Employers Furnish Lists.
Under the law Of 1891 employers
were not required to give list Of
I their employees and the salaries paid
I them; the amended law of 1905 requires
that these lists shall be furnished
Under the old law when a man failed
! to give in his returns he lost the right
I to appeal when the assessors fixed
is fined 3 percent Of his tax for such
failure. The far reaching power OF
| the chairmen Of the local assessing
commissions, by which they could put
the taxpayer through a rigid inQuisi-
ton, was curtailed, although any per-
son having an income of less than 5000
marks was thencefOrth denied the
right OF appealing from the findings OF
an assessment commission
Incomes Under S225 Exempt.
Incomes under 900 marks ($225) are
exempt from taxation under the German
I laws. From that point up the rate Of
taxation gradually increases from a
merely nominal rate until. at the 10O,-
I 600 mark point the rate becomes nor
NAL, which is. except for the three
year period referred to above, per-
cent AS the law now stands each
faxnaver is reouired n make a refT1r1
showing the amount Of his income and
! the items which constitute it This
provision does not affect those who
/ have an income Of less than 5000
marks. For that class Of incomes a
preliminary valuation commission is
made up, usually presided over by the
mayor Of the village. This commission
looks over the community and # IT
has reason to think that any one claims
( immunity from reporting his income
when he is not entitled to that i'm
munity, his name is certified to the
regular commissions, and his financial
status investigated
Property Tax Is Highest.
When Germany wanted to differ
entiate between earned and unearned
incomes 1t did not alter the income tax
law itself. It simply decided to put a
tax Of small proportions on all prop
erty. This tax is approximately equal
to percent on the income derived from
such property. and the practical result
was to make the tax rate on property
income / percent higher than on labor
! income. a very satisfactory degree OF
differentiation from the standpoint Of
the economist
DOdEfnE Not Tolerated.
In the collection Of the tax the gov
eminent will not tolerate any attempt
at lodging. Any one giving in incom-
Dlete fraudulent returns is liable 10