Expenditures of the Russo-Japanese war / by Gotaro Ogawa.

EFFECTS ON PUBLIC FINANCE

145

other words, of the amount of sales, the amount of capital, the
amount of contract or remuneration, the amount of rentals
for buildings, and the number of persons employed in the
business, two or three of the items were taken together and
were made the basis for assessment. Moreover the rate was
uniform for all sizes of business, but different according to
kinds of business. Therefore, the amount of the tax did not
agree with the income, which generally represents the efficiency of business, but was heavy for a small business and light
for a large one, heavy for some kinds of business and light for
other kinds. However, it would be wrong to pass an unqualified condemnation upon this system of business tax, for it
would be an extremely difficult and almost fruitless task to
attempt to estimate the income from each particular business.
When the rates of these taxes are low, their evil effects are
small. But during the war with Russia the rate was raised
by I50 per cent, for all sorts of business taxes without distinction, which at once made them an unjust and heavy burden.
As regards the income tax, it was raised at a uniform rate in
the first tax increase. In the second tax increase, however,
the rate was graded in consideration of the ability to bear the
burden. As a result of these war-time increases, the rate of
tax A of the first class was raised by 252 per cent of the
principal rate, that of tax B of the same class by I80 per cent
to 500 per cent, while the third-class income tax rose by 200
per cent to 370 per cent. Moreover, no small amount of injustice was done in not raising the rate of levy on the secondclass income, that is, interests on national bonds (and company debentures), though this was due to the government's
policy to uphold the value of war bonds. When we consider
the burden of the whole taxes on receipts, we can not doubt
that the charge grew very heavy for the owners of land and
those engaged in business, because they had to pay the increased income tax, besides the land and business tax, which
were abruptly increased at the same time.
We have already noticed how great was the extent of the
increase of taxes on receipts, and must now recognize that the
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