INCOME TAX IN SWITZERLAND.

Auckland Star, Volume XIX, Issue 145, 20 June 1888, Page 4

INCOME TAX IN SWITZERLAND.

Those who believe in the wisdom of imposing a progressive income and land tax as a means of raising revenue in New Zealand, willbeinterested to learn that the little Republic of Switzerland has embodied the progressive system in its fiscal legislation. That miniature State would appear in several respects to be quite a model one. The statistics collated by the Auckland Political Financial Reform Association show that its three millions of people, with an annual external trade of over seventy millions Stirling, have such a small public debt, and such an economical system of government, that the taxation amounts to only 13s 9d per head of the population. We learn, on the authority of Mr R. H. Palgrave, that in Switzerland the system of progressive taxation both on property and income is in force in 15 of the cantons of the Confederation. Some tax both property and income on this basis, a few iucome only, and one property alone. In a paper read before the Royal Statistical Society in London recently, Mr Palgrave explained the I Swiss law as follows :—

In the canton of Basel-Stadt the method has been in force since 18 .0, the present arrangement dating only from March, 1887. The cantonal taxes were £121,200 in 1881; or about at the rate of £1 17s 6d for each of the 65,000 inhabitants. The number of the taxpayers is much more limited, being less than 8,000 in 1884. The taxpayers are divided into classes according to the amount of their pro perty and income. The incomes derived from property are charged at different rates from thdse derived from earnings. The tax commences at incomes of £40 a-year, but while £40 derived from property is charged £1 2s 6d a-year, £40 derived from yearly earnings is charged 6s Sd. The rates vary as the income increases. Thus £240 a-year from property pays £12 6s Bd, and from yearly earnings £5 19s 2d. Incomes ten times as large pay a great deal more in proportion ; thus £2,400 from property pays £250 a-year, from yearly earnings £136. Over £2,400 a-year the rate is scarcely progressive. In canton de Vaud a somewhat similar system prevails. But in the case of income derived from earnings there is a very curious modification of the assessments according to the number of children in the family. A bachelor is charged the most; a married man, without family, somewhat less ; the parent of one child at a lower rate. The scale is graduated down to the happy father of 12 children, and it works out thus : While a bachelor has to nay a tax if he possesses an income of only £20 a year, though it is true he is called upon to contribute only lfr., say 9d, annually to the State, the married man does not begin to pay till he has £40 a year, out of which he has to pay Is 6d, and the father of 12 children is not taxed till his income amounts to £300, and on that he contributes 17s 3d (seventeen shillings and threepence) annually, while the married but childless man with the same income pays £4 14s 6d, and the bachelor £5 2s 3d.

These taxes are arranged on the principle of equality of sacrifice—in other words, on the ability of the different classes to pay them. The Swiss Republic is shown to be far in advance of the boasted democratic rule in Australasia when so many of the poorer inhabitants are wholly exempted from taxation, instead of being as here the most grievously taxed. And the greater wisdom of the Swiss is also shown in the fact that, whereas they tax bachelors much more heavily than men with families, we let the rich bachelor go untaxed, and grind additional taxation from the married man for every child that is added to his family. The New Zealand method is certainly not the way to go to work in building up a nation.