378 POPULAR SCIENCE MONTHLY. 



Tlie result of a progressive income tax instituted a few years 

 since in Yaud and other prosperous and populous Swiss cantons is 

 reported to Lave already verified tlie predictions and prophecies of 

 the European economists. The project has been often discussed in 

 England, France, and other countries, but the tendency of economic 

 discussion has always been generally adverse to it, on the ground 

 that such forms of taxation would discourage the permanent invest- 

 ment of capital, and encourage capitalists to transfer their capital 

 and business to other and foreign localities. Vaud, however, in par- 

 ticular, determined to ignore the economists and impose the tax, and 

 the inevitable disturbance of capital is rejDorted to have taken place. 

 One of the chief capitalists of Lausanne, a Swiss tanner named Mer- 

 cier, employing several hundred workmen, is moving his business 

 from Lausanne to the other side of the lake (Geneva) at Evian. Evian 

 is in French territory, and there is no progressive income tax there. 

 " Up to this time," wrote M, Mercier, in a letter published by the 

 Lausanne papers, " I have paid over 20,000 francs a year in state 

 and town taxes. The new law would raise that figure to 80,000 

 francs or more. I owe it to my family to withdraw out of reach of 

 what I can not consider otherwise than downright spoliation." 



A recent economist, commenting on this transaction, thus 

 curtly developed the whole subject: " The fact is that a progressive 

 income tax will not work under modern conditions. The modern 

 movability of capital has made all the difference. The Florentine 



unfortunately, as investors knew to their cost, were almost valueless. An arrangement, 

 however, proposed by Sir Robert Peel in 1858 gave a substantial relief to those who 

 had precarious incomes. They made their returns on an average of the income dur- 

 ing the three preceding years, and, if the amount fell short, a rebate was given on the 

 difference. He urged that they might make an effort this year to induce Parliament and 

 the Government to revert to the old system, which, it was evident, would be only fair and a 

 great boon to all those whose income depended upon their own exertions, whether in law, 

 medicine, or commerce." He contended that the rising and successful man was assessed on 

 less than his income, while the man whose income was falling was made to pay on more 

 than his income. The Chancellor of the Exchequer said in reply that " his friend had 

 urged the desirability of 'returning to the system that existed prior to the passing of the 

 act of 1865. He seemed to have overlooked the fact that the alteration effected by that 

 act, which he now wished to overthrow, was introduced at the express instance of Mr. 

 Hubbard, who was a strong advocate for lightening the burden of the income tax wherever 

 practicable. Taking the average of a man's income for three years was a plan specially de- 

 vised to meet the difficulty in the way of appeal that would be experienced by business and 

 professional men. He was quite willing to allow that system to continue, as he believed 

 that it was, on the whole, fair to both parties. The proposal of his friend, however, while 

 adhering to the form of making a return upon the average, did not in fact carry out that 

 principle at all, for the first year was only to be struck out where the fourth year showed a 

 loss. Surely, therefore, if the revenue was to collect only on the small receipts, the prin- 

 ciple of average ceased at once. For this reason he did not feel justified in accepting the 

 amendment." 



