Prince Bismarck has gone a step farther on the" Socialistic"
path. He has introduced two Bills into the Prussian Chamber, altering the incidence of the Income-tax. By the first, all persons with less than £60 a year are declared exempt, and the tax is graduated on all who receive incomes between £60 a year and £500, the highest rate being 3 per cent., or 71d. in the pound. To remedy the deficit thus created, which amounts to £325,000 a year, an additional Income-tax is imposed on all incomes derived from invested money, beginning with lid. in the pound on dividends of £30 a year, and rising to 5d. in the pound on dividends above £500. The progressive scale goes no higher, but this is, of course, in principle, the imp& progressif, and differs wholly from our own system of exempting necessary income. The exemption of landed incomes is justified by the existence of the land-tax, but is really caused by the impossi- bility of getting such a tax through the Upper House. It is very doubtful if the second Bill will pass, and if it does, the Chancellor will find that he has given the Socialists a very dangerous weapon. There is a point at which taxation on sleeping capital drives money underground, like the taxation in Oriental countries, and a much nearer point at which investors invest abroad. Swiss capitalists do that already.
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