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the revenue Professor Seligman proposes, as he has often done in the past, that the proceeds be apportioned among the states (p. 658), "to be utilized as the necessities or convenience of each state may prescribe." This does not seem quite consistent with the statement above cited that neither do the states need the income tax for purposes of revenue; but the inconsistency is not important. If the income tax is coming, whether we need it or not, some way must doubtless be found to spend the proceeds.

An examination of the "programme" on the administrative side shows that the author has attempted to formulate a set of mechanical rules, which leave as little as possible, preferably nothing, to the discretion of the administrative officers. Hence, the "lumpsum income tax" is rejected, because it "would strain American administrative methods to the breaking point," and "surely be impotent to secure the relative justice which is the primary desideratum of an income tax" (p. 660). While on the one hand we must not forget that our greatest successes in tax administration have been achieved when (as in Wisconsin) strong men have been in control, hampered as little by law as possible, yet on the other hand it would undoubtedly be a comfort to the taxpayer and the tax collector alike to have a self-acting law, if such a one can be written. A "stoppage-at-source or schedule income tax" is preferred. Some of the main schedules are suggested. The reviewer ventures to condense them in the following outline:

Schedule I. Incomes derived from corporations, to be taxed in three classes: Class 1, Corporate incomes as such; in this it is intended to reach the real profits as a whole whether paid out in dividends, or interest, or reinvested, or however else disposed of. Class 2, Tax on individual incomes derived from corporations, mainly dividends and interest; this he does not consider double taxation (p. 662-3). Class 3, Salaries of officials and employees (p. 664.)

Schedule II. A tax on government salaries (p. 665).

Schedule III. A tax on income from government securities (p. 665).

Then follow four other "chief classes of income," not listed as schedules: income from real estate; income from securities other than corporate securities; income from business; and income from professions. Income from real estate, it is proposed to tax by a combination of actual and "statutory" or arbitrary estimate, the rents paid or estimated from assessed valuation being

used. The taxes on real estate income are to be paid by the occupier. Mortgage income would be included under real estate, the owner of the real estate being expected to deduct the proportionate amount of the tax from the interest he pays. The only important class of securities, other than corporate or government, being mortgages, are disposed of here. Business incomes will, he thinks, present the weakest part of the system, and here stoppage at the source is impossible. To estimate these he proposes an honorary board of two prominent business men for each "broad class" of businesses, who are to aid the assessors. The same suggestion applies to professional incomes. It is not directly stated, but the inference is that "declarations" would be required in these two classes.

The program includes exemption of not more than one or two thousand dollars. It also includes differentiation: (1) by granting a lower rate on business and professional incomes to administration; (2) by making a distinction between "earned" and unearned incomes; (3) by higher rates on incomes from privilege. Progression is not considered possible at first, but is to be hoped for in the future. On this point, the reviewer is not sure that he understands the author. The statement (p. 671), "Finally, so far as progression is concerned, it is clear that the adoption of the stoppage-at-source scheme is incompatible with the general plan of a graduated income tax," seems to be inconsistent with the statement on the preceding page, "we might, at least, introduce the English principle of abatement in order to permit a gradually diminishing reduction of the tax between the limit of absolute exemption and the point of normal charge." ("Reduction" must be a slip of the pen; it should obviously read “increase"; the English tax is degressive.)

Although the prophecy and the program seem to be of greatest interest to the general reader and hence have been selected for this review, it must not be understood that they occupy the chief place in the book. On the contrary, by far the greater part of the book is devoted to the historical survey, which is of great interest. The history of the British income tax is given at greatest length. This is the first time that the story has been set forth at such length and with such intensive research. It is rendered especially valuable by the numerous citations from contemporaries.

The history of the income tax in all other important countries including our own is reviewed. The story of the half century of as

yet unsuccessful struggle for an income tax in France does not seem altogether consistent with the theory that the income tax is the inevitable product of triumphant democracy. Surely, the opposition of the conservative Senate is not enough to account for the failure. Possibly a better explanation might be found in the fact that in France, as in some other Latin countries, whose tax systems evolved from the principle of the tithe, there is already a system of correlated taxes whose combined effect is substantially that of the income tax.

As the author of Progressive Taxation in Theory and Practice, The Shifting and Incidence of Taxation and of the volume of Essays in Taxation, all of which have run through several editions and have been translated into foreign languages, Professor Seligman is one of the widest known "authorities" on public finance. For that reason, as well as for its own contents, the book will command a wide constituency.

University of California.


Tariff Reform, Employment, and Imperial Unity. By GEORGE COATES, M.A., M.D. (London and New York: Longmans, Green and Company. 1911. Pp. viii, 120. 2s. 6d.)

The Imperial Organization of Trade. By GEOFFREY DRAGE. (London: Smith, Elder, and Company. New York: Dutton and Company. 1911. Pp. xviii, 374.)

These two tariff studies have their theme in common, but little else. Dr. Coates' book is a typical specimen of British popular neo-protectionist literature, strongly nationalist and imperialist in tone, as dogmatic as ever any least distinguished parrot repeater of Bastiat or McCulloch; and, in the phrase in which Mr. Asquith summed up the whole tariff reform agitation, "incurably sloppy" in its argument. American readers will find an historic interest in most of the theories advanced. The core of the book is the old two-profits argument, set forth with many variations.

Mr. Drage affords a refreshing contrast in his judicious and temperate, though far from colorless, treatment. He writes from the viewpoint of a strong Unionist and Imperialist, anxious, if possible, to find in the Chamberlain policy the long sought means of binding and strengthening the Empire. His conclusions, however, are decidedly adverse to all three aspects of the Tariff Re

form movement. Preference: the colonial preference on British goods is of real value, but limited by local protectionist feeling and by concessions to other states; British preference on colonial goods would involve a much more radical change in fiscal policy, hamper home industry if extended to products of all the colonies and create friction if granted only to some, and run counter to the protectionist demands of home producers and the reciprocal concessions granted foreign nations; Argentina, again, is a commercial colony of Britain. Retaliation: a doubtful weapon in any situation, not certain to bring the opposing nation to time while certain to create vested interests at home, and a weapon which Britain, drawing its supplies of food and raw materials largely from the most highly protectionist countries, is not in a position to brandish; the Brussels sugar convention, however, proved her power of exerting pressure to prevent dumping. Protection: no panacea for unemployment and a serious burden for producer and consumer alike.

The chief weaknesses which Mr. Drage finds in Britain's present situation are, her gradual conversion from the world's workshop to a Rentner Staat, from entrepreneur to financier, Manchesterhubbed to London-hubbed; the growing competition of subsidized and under-equipped foreign shipping in coasting and neutral trade, and the more serious decrease of the proportion of British seamen in British crews; and the decline of agriculture. For all these ills, however, he proffers hopeful remedies. Economic organization of the Empire, fiscal unity failing, must come through imperial preference in credit, improvement of inter-imperial postal, telegraphic and steamship communication, and uniformity in commercial legislation. It is, however, on political rather than on economic lines that Mr. Drage expects closer union to come; and he concludes by urging the Imperial Conference of 1911 to take the first step in centralization by adopting the Pollock-Deakin-Ward plan of a permanent Imperial Council, advice which the Conference for the second time rejected. It is significant of the difficulties of distance and lack of close touch which face those who wish to bring under a single administration all the scattered dominions of the Empire that the motto quoted on the title-page is ascribed to "Mr. F. W. Borden, Leader of the Opposition, Canada," a confusion between the able leader of the Opposition, Mr. R. L. Borden, since become Premier, and his cousin, a member of the late Cabinet, Sir F. W. Borden.

Mr. Drage's book does not profess to throw much new light on the fiscal problem, but it presents the best available summary of the economic and political issues at stake, and the main considerations on both sides.

Queen's University, Kingston, Canada.


Elements of Indian Taxation. By LEONARD ALSTON. (London: Macmillan and Company. 1910. Pp. ix, 115. 2s.)

The author's purpose in this book is twofold: first and foremost, to describe the various taxes and revenues derived therefrom instituted by the English Government of India; and secondly,. to demonstrate that in establishing these taxes the Government had the same principles in view which have since 1846 dominated the United Kingdom. Certain well defined ideas run through both systems, as for instance that taxes should be as nearly as possible proportioned to income; that normal industry should be affected as little as possible by the imposition of any tax; and that all the revenues collected minus the cost of collection should go to the public treasury without benefit to any particular individual or interest.

It is always

In the main the author makes out a good case. interesting to note how economic principles must yield in their application to the particular circumstances of the case. The British system of taxation, mainly customs, excise, income and inheritance taxes, rigidly applied to India, would supply but a small fraction of the necessary revenue of that Empire, and the author convincingly shows that certain variations were inevitable. Thus the Indian land tax is the practical equivalent of the English income tax providing above 38 per cent of the entire receipts of the Indian Government, and if one adds the income tax assessed on incomes not derived from land this total is not far from 42 per cent, contrasting with the 24 per cent of the total receipts furnished by the English income tax. On the other hand the customs and excise (including the salt tax) which provide on the average about 30 per cent of the Indian revenue, or about £14,000,000, yield about 50 per cent of the English revenue or £68,000,000. The general poverty of the people of India is strikingly illustrated by these figures. However, the author aims to show that the same principles are in operation in both countries. The commodity taxes are roughly a form of income tax on small in

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