Is it not well, then, to ask ourselves whether taxation need be the only hope of State revenue? Here comes in a rather curious fact. We have passed through troubled days in which additional taxation has been denounced as "Socialistic," and the "Observer" newspaper tells its readers constantly that modern Socialism simply means taxation.
As a matter of fact, it is because the British Government has been one of the least Socialistic in the world that it finds itself in 1910 raising so much of its revenue from taxation.
The Germans are heavily taxed, but they are so much poorer than the British people that the sum they raise in taxes is much smaller than the sum raised here. It should not be forgotten that, in considering German taxes, we have to add the taxes raised by the governments of its various kingdoms and States to the taxes raised by the German Imperial Government. When that is done it will be found that the total amount so raised, although considerable, is not nearly enough to meet the Imperial and national expenditure. What is the explanation? I commend it most earnestly to the politicians and publicists who fill the air with clamour about Socialism.
Consider the following extract from the official description of German Taxation in Blue Book, Cd. 4,750:
To make any profitable comparison of direct taxation in England and Germany, it is necessary to take into consideration in the case of the latter not merely the Imperial taxes, but also the taxes levied by the Federal States. It is also important to remember that a large portion of the States' expenditure, in Prussia as much as 47 per cent., is covered by the profits of railways and other industrial undertakings, the State being thus enabled, pro tanto, to dispense with taxation.
Varying, but usually considerable, proportions of the State revenues of the kingdom of Bavaria, the kingdom of Saxony, the kingdom of Wurtemberg, the six Grand Duchies, the five Duchies, and the seven Principalities, not to mention the free cities, are derived similarly from State undertakings, ranging from railways to forests, and from mines to china factories.
I beg the reader to realize that but for these enormous State natural revenues the Germany of to-day would not be able to build Dreadnoughts or to sustain the greatest army in the world. Successful State Socialism has been the backbone of German finance, and the secret of a big expenditure and the maintenance of the greatest army in the world and the second largest navy in the world by a poorer country than ours, in which (basing ourselves on the official Income Tax Statistics of Prussia) we are able to affirm that one-half of the people are under the income line of £45 a year (17s. 3d. per week).
Germany derives from her Customs Duties, believed by ill-informed people here to be the chief feeder of her revenues, about £30,000,000 a year. This may be contrasted with a single item of German State Socialist revenue:
NET PROFITS OF THE PRUSSIAN STATE RAILWAYS
| £ | |
| 1906 | 33,480,000 |
| 1907 | 34,323,000 |
| 1908 | 31,180,000 |