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

146 ECONOMIC EFFECTS OF THE RUSSO-JAPANESE WAR

increase of taxation necessitated by the war proved an occasion of a far-reaching change in the condition of the levies on
receipts. Since these taxes are designed to be placed on the
receipts, especially the income, of the individuals, the socalled income tax must theoretically form the basis, the land
and business taxes being imposed to supply its deficiencies.
Before the Russo-Japanese War, however, the land tax still
occupied its traditional position as the most important of the
taxes on receipts, and the others appeared in the light of supplementary levies. In consequence of the economic changes
from the opening of the war, and in proportion to the economic
development, income and business taxes made a striking
growth and attained the status of independent taxes, in comparison with the land tax, which had small room for growth.
Taxes on consumption
Of the taxes on expenditure or consumption, the tax on
sake, the tax on soy, the consumption tax on sugar, the
hunting-license tax, and customs duties had their rates increased, as already stated, while the consumption taxes on
textiles and on petroleum were newly created. At the same
time, the government manufacture and monopoly of tobacco
and monopoly of salt were inaugurated. Thus, all the important taxes on consumption were either raised in their rate
or newly created.
As the more important of the taxes on consumption have
the necessaries or semi-necessaries of life as the object of
taxation, and are charged according to the quantity consumed,
regardless of the ability of taxpayers to bear the burden, the
incidence of consumption taxes naturally falls upon the lower
classes, so that, from the nature of the levies, the rate of these
taxes cannot be raised so high as in the case of other taxes.
In the general war-time increases of taxation, however, the
rates of consumption taxes were unavoidably raised to a considerable extent. In Table B at end of this chapter1 is shown
the upward movement in the revenues from consumption
1Post, pp. 156-7.