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

RESOURCES FOR DEFRAYING WAR EXPENSES

73

created or raised in the second financial program with a view
to protecting farm land; but as the landowners are largely
of the wealthier classes, they were found capable of bearing
this extraordinary burden of the war-time taxation.
The business tax, which is levied on commerce and manufacture as the land tax is levied on agriculture, was created
in Japan in I897 as a source of national income after the war
with China. The tax was levied on the capital of the business,
the gross income from the same, the rent of the building in
which the business is carried on, the number of employees,
and other visible standards. According to the kinds of business, from.0005 to.0015 of the capital or of the gross income,
from.02 to.06 of the rent, and I yen per employee, were
imposed. These rates were raised 70 per cent in the first
increase and 80 per cent in the second, so that the war tax
became one and one-half times as much as the original duty.
Since the nation was then making rapid progress in commerce
and industry, the business tax proved a sure source of increased
income to the Treasury.
The income tax was more or less increased in the revision
of the Income Tax Law, in February, 1899, but was now raised
to nearly the same extent as the business tax, on account of
its capacity to bear more for the needs of the war with Russia.
Formerly the incomes of juridical persons or corporations,
designated Class I, were taxed at the uniform rate of.025;
the interest on public bonds and bonds issued by business
companies, called Class 2, at the rate of.020; and personal
incomes, called Class 3, above 300 yen a year, at the rate of
from.oIo to.055. The personal incomes were divided into
twelve grades, the highest being above Ioo,ooo yen a year,
and the rate increased with the amount of the income. In the
first increase these rates were uniformly raised 70 per cent
except the second-class incomes, and in the second increase
80 per cent with all the classes. The juridical persons,
according to their tax-bearing powers, were divided into (A)
joint-stock companies and limited partnerships consisting of
twenty-one or more shareholders or shareholders and partners;