Page:Economic Development in Denmark Before and During the World War.djvu/111

Rh in Copenhagen, fixed the same percentage upon all incomes exceeding 2,400 kroner ($643); smaller incomes were taxed on a decreasing scale, and those below 800 kroner ($214) were exempted altogether. Orthodox economists in the middle of the last century considered such taxation just; some, indeed, maintained that the rich ought to pay proportionately less, because they caused the treasury less trouble. Even such men as John Stuart Mill would not hear of a progressive income tax; and the famous English Income Tax, which has been a model for similar taxation outside the boundaries of the United Kingdom, was not so constructed as easily to admit of a sliding scale. The modern trend of thought is obviously that the individual does not stand as an isolated member of society who receives a service from the state and pays for it, but is a member of an organism who, according to his power, contributes to a common purpose.

It would be extremely interesting to follow more closely this change of opinion which is the basis of the transition to the modern system, with its progressive rates applying especially to persons with very large incomes. Simultaneously with this change of opinion we find in many places, step by step with the advance of socialistic ideas, the centre of gravity removing from indirect to direct taxation. In Denmark this is seen in the Customs Act of 1908, which is one of the few liberal customs acts we now have. The real transition began in 1903, with a change in the entire fiscal system by levying an income and property tax for the state (after the deduction of a certain small untaxable income) of 13 per mille on the lowest income and 25 per mille on the highest, the increase to stop only at 100,000 kroner. The property tax was fixed at 0.6 per mille on the value of the property.

These taxes became the starting-point for the later legislation. In 1909, on account of the Defence Acts, income and property taxes were raised, and three years later they were raised again, when the property tax ranged from