undertake the consideration of an income-tax project. "We have investigated how such a tax could be established here with due regard to our actual organization and our financial habits, while dealing delicately with the transition and preserving in our actual system all that is not opposed to it. We do not wish to upset anything, nor to compromise the credit of France. We desire only to eliminate from our legislation the other bases which have been introduced into it, and which are opposed to the higher principle of proportionality, as found in the income tax." The only part of the old system that Gambetta desired to retain was the land tax; all the other existing taxes he expanded into the various schedules of a comprehensive income tax. He was, however, not in favor of the abolition of the existing direct taxes and their replacement by a single income tax resting on the declaration of the taxpayer. This, he thought, would involve entirely too great a risk. It would lead to immense frauds and evasions, and would thus necessitate a rate so high as to be burdensome to the honest taxpayer. Moreover, it would involve too much inquisition.2

Gambetta's scheme was opposed in committee by Léon Say who, from now on, became one of the leading opponents of the income tax. Notwithstanding Say's heated opposition, however, the project was adopted by the commission and was submitted to the Chamber. But although the report led to a general discussion, the great political crisis of 1877 prevented any serious attention being paid to it, and nothing was accomplished.1

In the following year, 1878, Laroche-Joubert repeated his old proposition for a general property tax, which had been originally advanced in 1870 and again in 1876. This bill

1 This part of the report is reprinted in Chailley, pp. 545–546.

2 For this part of Gambetta's report, see J. Caillaux, L'Impôt sur le Revenu. Paris, 1910, pp. 133-134. For Gambetta's speech, see also Guyot, pp. 196-200. 8 For Say's objections, see Chailley, pp. 554-555.

For a discussion of Gambetta's project, see an article by Léon Say, entitled, "Les Reformes projetés dans la Système d'Impôts en France. La Proposition de M. Gambetta. L'Impôt sur le Revenu," Journal des Économistes, May, 1877.

U

purported to "transform the entire tax system in order to serve more equitably the interests of the most numerous parts of the population."1 This scheme for a general property tax or a tax on capital had been advocated in France for several years by quite a number of writers, of whom Menier was the most prominent.2 Menier's enthusiasm for a single property tax was, however, based largely on mistaken information as to the workings of the system in America, and found but scant favor with Parliament. In 1880 it was succeeded by the project of Marion for a low general income tax3 and in 1882 by that of Silhol, who followed rather closely the scheme which had been adopted a few years previously in Italy.* In 1883 several bills were submitted to the consideration of the Chamber, that of Leydet for a progressive income tax, that of Sourignes for a combined property tax and income tax, and that of Ballue for a compensatory income tax on movable property, with high rates and differentiation. Ballue's proposition attracted wide attention and was referred to a committee. Between 1883 and 1886 Ballue varied these

1 Proposition de Loi ayant pour Objet de transformer tout nôtre Système d'Impôts, de façon à ce que l'Intérêt des Populations les plus nombreuses se trouvent plus équitablement observés. Présentée par M. Laroche-Joubert, Chambre des Députés, Session de 1878, no. 305.

2 See especially his books entitled, Du Relatif et de l'Absolu en matière d'Impôts ou Étude Comparative du Principe des Impôts Directs et des Impôts Indirects, 1872; Réponse aux Objections faites contre l'Impôt sur le Capital à la Séance de la Société d'Économie Politique, 1872; La Réforme Fiscale, 1873; L'Impôt sur le Capital, 1874; La Société d'Économie Politique et l'Impôt sur le Capital, 1875; Mémoire à MM. les Membres de la Commission du Budget, 1876. Other contemporary advocates of the single tax on capital or a general property tax were Chardon, Projet d'un Impôt Unique établi en raison du Capital. Paris, 1875; Amedée Lasseau, Sur diverses Questions relatives à l'Impôt. Paris, 1876; and the anonymous work De la Transformation de l'Impôt. L'Unitaxe. Impôt sur le Capital et sur les Éléments Constitutifs des Bénéfices et du Revenu. Saint Quentin, 1877.

3 Printed in Guyot, pp. 202-203.

4 Cf. Chailley, pp. 557-570.

5 Proposition de Loi ayant pour Objet d'établir un Impôt sur le Revenu, proportionnel et progressif. Presentée par M. Leydet. Chambre des Députés, Session de 1883, no. 2224.

6 For the schemes of Leydet and Sourignes, see Guyot, pp. 204-206.

propositions so as to introduce them in reality four times. The introductions to these bills, together with the report of the commission to which they were referred, contained long descriptions of the existing situation in France and abroad, as well as an interesting discussion of the various methods of income taxation. In a detailed history of the French reform, the propositions of Ballue would merit a careful analysis.1 Nothing came of all these efforts, however. In the meantime, analogous schemes had been presented by Paul Bert in 1885, calling for a seven-per-cent general income tax,2 and by Wilson, by Bourgeois, and by Camille Dreyfus in 1886.3

By 1886, however, the movement in favor of a reform of the tax system had become so pronounced that the entire subject of the income tax was referred for careful consideration to the budget commission. The report, which was written by the well-known economist and subsequent Minister of Commerce, Yves Guyot, was presented in October, 1886. It was a notable production, and was published separately in book form. Guyot gave a short account of the principal systems in existence throughout the world, and added a summary of all the projects which had been advocated up to that time in France. Although he was a confirmed free trader and a determined opponent of all indirect taxes, he concluded

1 These bills and reports are as follows: Proposition de Loi ayant pour Objet la Réforme de l'Assiette de l'Impôt. Presentée par M. Ballue. Chambre des Députés, Session de 1883, no. 1610, 80 pp.; Proposition de Loi ayant pour Objet la Réforme de l'Assiette sur l'Impôt. Presentée par M. Ballue, et plusieurs de ses Collègues. Chambre des Députés, Session Extraordinaire de 1885, no. 65, 209 pp.; Kapport fait au nom de la Commission chargée d'examiner. la Réforme de l'Assiette de l'Impôt. Presentée par M. A. Ballue. Chambre des Députés, Session Extraordinaire de 1886, no. 1314, 273 PP.; Rapport Sommaire fait au nom de la Première Commission d'Initiative Parlementaire chargée d'examiner la Proposition de Loi de M. Ballue et plusieurs de ses Collègues, ayant pour Objet la Réforme de l'Assiette de l'impôt. Par M. Francis Laur. Chambre des Députés, Session 1886, no. 360, 65 pp.

2 Cf. Gaston-Gros, p. 519.

8 Cf. Philippe, p. 121.

4 Yves Guyot, L'Impôt sur le Revenu, Rapport fait au nom de la Commission du Budget sur les Questions soulevées par diverses Propositions relatives à l'Impôt sur le Revenu. Paris, 1886.

that the path of reform lay rather in the improvement of the existing system of "real" taxes than in the adoption of any form of income tax. A discussion ensued in November. Andrieux declared himself in favor of the principle, but stated that the great question to be determined was: What kind of an income tax are we prepared to accept? Camille Dreyfus attempted to answer in full the objections to an income tax which had been raised by some other speakers. The discussion was cut short by Carnot, the Minister of Finance, who declared that in his opinion the time had not yet come for the introduction of an income tax.1

The growing feeling in favor of some kind of an income tax could not be checked, however. Tax reform was fast coming to the front as a political question, and the Ministers, Sarrien and Jules Ferry as well as Freycinet himself, were led to emphasize the point which had been made a decade before by Rouvier, namely, the need of reform on democratic lines. When Freycinet was succeeded by Goblet in 1886, he put the plank of democratic tax reform in the very forefront of his programme. The feeling had now become so pronounced that on February 18, 1887, Deputy Périn and a number of his colleagues moved an amendment to the annual finance law in the words: "The government is invited to present the project of a single and progressive income tax." After an elaborate speech by Périn the motion was adopted by the House, by the substantial majority of 257 against 228 votes, although the words "single and progressive" were eliminated.2

It is true that the Senate expunged this addition to the law, but the important point had been gained; since the Chamber of Deputies had now, for the first time, put itself on record as in favor of some kind of an income tax. What was henceforth known as the Périn amendment thus came to play a great rôle in the movement, and from now on the government itself began to take the matter energetically in hand.

1 The discussion will be found in Philippe, pp. 122–138.

2 For Périn's speech see Philippe, pp. 139-150.

§ 5. From Dauphin's Bill to the Extra-parliamentary Commission, 1887-1894

From 1887 on, at intervals of every year or two, government after government introduced an income tax project, each of which differed more or less from that of its predecessors, in the vain hope of winning the assent of the House to some particular scheme. It needed, however, a quarter of a century to bring about the desired result. The opposition was loud and energetic, and the natural repugnance of the propertied classes to any such innovation was heightened by the attitude of the economists. The liberal school was now at the zenith of its influence, and the introduction of the study of economics into the law schools, which was after a decade or two to bear fruit in a younger and more progressive set of economists, was still too recent to produce any effect.

Leroy-Beaulieu, in his classic work on the Science of Finance, originally published in 1877, and reissued in new editions every few years, vigorously opposed the income tax. In this he was ably seconded by Léon Say, who now in the eighties and early nineties did not tire of making speech after speech against it, and who gave a special course of lectures in the school of political science, devoted to the attempt to show the dangers and iniquities of the system. The monotonous uniformity of the literary opposition to the income tax was broken in the eighties by only two books. One of these was written by Professor Denis at the instigation of the common council of Brussels, and consisted of an admirable report on local income taxes in Belgium, and national income taxes abroad. As this was, however, meant primarily for Belgian consumption, it exerted but little influence in France. The other was by a French lawyer, Chailley, who wrote what is still to-day one of the best books on the subject, — accurate,

1 These lectures were published in book form under the title, Les Solutions Démocratiques de la Question des Impôts. Conferences faites à l'École des Sciences Politiques. Par M. Léon Say. 2 vols., Paris, 1886.

2 H. Denis, L'Impôt sur le Revenu. Rapport et Documents présentés [au] Conseil Communal de Bruxelles. Brussels, 1881.