FRENCH FINANCE.

Hawera Star, Volume XLV, 6 March 1926, Page 6

FRENCH FINANCE.

CAUSES OF CHAOS. THOUSANDS ESCAPE INCOME TAX. One of tlie root causes of France’s financial chaos, which, has involved the fall of five Ministers of Finance, and is still a long way from being remedied, is her people’s innate repugnance of direct taxes. There must be more income-tax dodgers in France than in any other country; and, although the rate of tax is not to be compared with that of Great Britain, or even of Australia, yet if everybody paid there would be an immediate solution tof all the trouble. In France, as elsewhere to a lesser degree, there is no conscience about the non-payment of taxes. In England every now and again a small announcement appears in the newspapers by which the Chancellor of the Exchequer acknowledges a few pence or a tew pounds —occasionally a good round sum —from some unknown con-science-stricken soul. Such an intimation has never been seen in France. M. Loucheur, before lie. vacated the Ministry of Finance, found not the remotest support for his reforms, the backbone of which was the levying of about £64,000,000 of new taxes. New taxes forsooth! Nobody seemed to think of making a determined effort to collect the old ones. True, M. Loucheur did propose to tighten up the penal clauses, but, rather than face the individual sacrifice involved in the payment of direct taxes, the people have been grasping at all manner of absurd alternatives, such as the auctioning of the railways, the telephones, and the tobacco monopoly. These are fantastic propositions which lead nowhere. Suggestions have been made that big items in the Dudget, for postal and other, public services, should be deleted, and that the moneys should be raised locally. “Then,” say the wise men. “there will be no need for any additional taxation.” Indirect taxation could be widely extended in France, and could be more readily and more cheaply collected than any fresh levies imposed directly on income.

The peasants as a body evade income tax. So do many of the industrialists and shopkeepers. ‘ ‘ WANGLING’ ’ TAXES.

“Wangling” is more common than paying. If everybody paid, the taxes would yield about £300,000,000, instead of less than £60,(XX),000. What can be done about it? The peasants have strong influence in the Senate. Their annual income is about six hundred milliards of francs. Officially the yearly net profit of French agriculture is set dowu at Tj> milliards of francs, but the amount actually paid in taaxtion is a mere 43,000,000 francs. While the farmer, with his hoarded wealth hidden on the premises, rather than trust the hanks, declines to pay up, the more accessible clerks and city workers are easier victims. If taxes were increased these would be the people who would have to pay. The coun-' try people would still escape. Anyone who has tried to register a letter or .get a carte d’identite, or . receive a postal parcel through the Customs, knows to what dx-eary lengths the cumbrous canker of officialdom has been stretched in France. There are big officials and little officials and a score in between, any one of whom can be l-elied on to gabble for five minutes at the slightest provocation, and all of whom seeim to take _ a fiendish delight in obstructive tactics. It is the government mind. Things are not the same in the Income Tax Department, because there are less than three thousand collectors for the whole country. They have been complaining for years of insufficient personnel, x-esulting in over-work and failure to do the job properly. Their association often has accused successive Governments of not caring whether the taxes are collected. . But a, country that toys with such ideas as taxes on windows, stair carpets and pianos, while all the time disregarding and rebelling against the system of taxes already in force, must pul] itself together, taking a lesson from countries where Budgets do balance, or it must be content to fall into the financial chaos which befell Germany, when the mark became worthless.

■ The franc may go the same way, and recovery then would be a much severer task than if the problem were tackled sanely to-day.