Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-02-21
RELATION OF TAXES TO WAGES
AFTER WAR PUZZLES GERMANY
Economists Point Out Necessity of More
Pay to Meet Increased Levy, and In
IDENTITY Uncertainty Adds to Problem

holders. and is in a position to know
the probable effect of taxation on the
masses. He declares that it proba bly,
has passed through the minds of count
less thousands, If not all, employers
that increases may be necessary, but
| feels that the average employer is not
| usually altruistie, and that therefore
raises nut be forced by those who need
them. This in spite of the fact that the
| German employer and man of means
in general has shown himself through
out the war to be self-sacrificing and
| thoughtful of those dependent on him.
| DR.. Schmidt disputes energetical-
| ly the claim of labor leaders that the
returning soldiers after the war are
going to depress wages. and upholds
| the contention of Herr Bergman and
others that Germany needs and will
need for some time to come all the
workers she can get. merely to re
supply herself. DIR. Schmidt adds that
| the size of a mans income really has
less to do with his expenditures than
has his own individuality.
! Views of Great Banker.
| The best representative of the out
| and-out believers that Germany is to
see a general and all-round rise in
salaries is the director of one of Ger
many's largest banks. who looks at the
matter from the standpoint Of the SAL
aried employe rather than that of the
wage learning workingman.
| He is confident that the heavy taxa
ton following the war will necessitate
a general advance in both salaries and
wages, and that this in turn will cause
a s1owing-up in the creation of new
capital for investment. The war, how
ever. he says. has revealed Germanys
economic strength in a new light which
makes new scale of measurements
necessary. and that that which earlier
| seemed an impossible task now seems
much easier.
| The burden of the new taxation, he
| declares. will not be as great as super
| fiCially appears. for there is likely to be
a good indemnity coming to Germany.
| The empires war outlay he estimates
at probable fifty billion marks
| twelve and a half billions of dollars}.
| The new measure for raising and re-
| paying this sum. with its interest
| charges, he believes will take variety
| of forms, such as monopolies on arti-
| Giles like tobacco and cigarettes. Many
| of the economic measures adopted
! during the war, such as the bread
| cards, he predicts will be retained in
the interest of necessary economy.
Predicts Change in Tax System.
The existing restriction upon the en-
pires tax practice-reserving income
and general property taxes to the
states-he thinks will be swept away
and replaced by imperial taxes of this
| sort.
He estimates that it will take Ger
| many some six or seven years to re-
| cuperate from the war. The recupera-
| ton. however, will be much more apid
even than was the startlingly rapid re-
cuperation of France after the war of
| 1901.
Retrenchment is the watchword of
| the great majority of laymen of those
| who are puZzling in advance over the
after-the-war taxation problem. They
| hope for booming business conditions
| possible indemnities and other favor
| able turns. but they believe that in
| economy rather than by increases of
wages that hit employer even while
| they help employees is Germany going
| to be enabled speedily to pay it's debts
The extent of the probable debt of
Germany after the war is a t present
favorite topic of discussion in the
newspapers of the empire. The Frank
furter Nachrichten seems to take mid
die ground with its estimate that the
total debt-merely from the war-will
be somewhere between forty and fifty
billions of marks, with consequent in
terest charges annually of from 2OOO-
| 900 to 100000 of marks That, plus the
state taxes. will increase the aggre-
gate annual interest to be raised by
100000 or 100000 marks.
| In peace times the empire has to
| raise something like 2,100,000,000 a
year,. 100000 of which is for the army
! and navy, and 100000, 900 for inuterest
| on debts. This sum, added to the in
terest on the war loans. past and pros
| budget to about 5000, OO0, 900 marks COR
| Que and a half billion dollars) year.
Uncertainty About Indemnities.
The Nachrichten predicts that this
sum will be raised wherever it can be
raised. 1t predicts taxes on war profits
| and on every form of increase of for
tunes, direct and indirect. The year
Iy burden will be as great. says the
| paper, as the combined income of all
| Germans who receive more than $4,000,
and the principal equal to the COM
] bined fortunes of all German million
| aires.
| The possible effect of war indemni-
| ties is a favorite topic of speculation
with many newspapers. The Berliner
| Tageblatt insists that it were mis-
taken and politically dubious to try
| at the present time to estimate what
! taxes are going to be or TO attempt
| to work out the problem until the in
| demnity matter is definitely settled
| 1t cautions, to be. sure, against the
building up of any hope that the in
| IDENTITIES will be very great, and at
i tacks certain unnamed newspapers
| which of late have amused themselves
| by working out mathematical and
| financial problems by counting on all
sorts of huge indemnities, by indulg-
| ing, as the Tageblatt says, in weird
| games with figures.
The Tageblatt is content merely to
| estimate that the taxes undoubtedly
will be heavy, very heavy and that
monopolies in all probability will be
| necessary. 1t expresses absolute con-
| fdence in the ability of DR.. Heifferich,
secretary of state for the treasury. to
determine wisely what the best method
of taxation shall be. and how much
! will be necessary, without impairing
the economic life of the people.