There has been loose talk of rich German industrialists evading taxation, and when the French and Belgians went into the Ruhr it was confidently expected that these industrialists would pay up rather than see their sources of wealth ruined. Public opinion in the United States, wrongly informed, thought the rich Germans had been “welching” and would now pay up promptly. Events have proved this belief wrong. But a study of the fiscal measures of the German Government would have demonstrated the absurdity of the assumption that the men who had a stake in the Ruhr had not been paying their taxes and that if they did so they would furnish ample means for the German Government to pay whatever the French demanded.
The German tax on fixed incomes--salaries, wages, and pensions--includes directors of companies in the Ruhr and all their high-salaried staff, officers in the army, and ministers of state. Laborers pay only 10 per cent, but the tax goes up to 60 per cent. As it is paid at the source, evasion is impossible. As for the capitalists, besides the income tax, they have been subjected to so many different levies that it would have been impossible for them to escape heavy taxation during the last four years. On top of the war profits tax came the emergency law of 1921, which put the Government in possession of 65 per cent of the largest fortunes. The forced loan law of 1922 took 10 per cent of all fortunes above a million marks, on which no interest was to be paid for three years. The legacy duty goes as high as 70 per cent and cannot be evaded by presents made by the living, which are taxed up to 60 per cent. Increment-values pay 30 per cent, and public companies are subjected to a foundation capital tax of 7½ per cent. Then, there are dividend and corporation profit taxes. The figures would seem to show that the propertied classes in Germany are paying 90 per cent of the taxes, and could not, if they would, give more to meet reparations demands.[22]
Successive Cabinets since the war have been criticized for swelling the budget with enormous sums for railways and public works, for not taxing the people to the limit, for allowing the capitalists to send money out of the country. This policy, or lack of policy, has been interpreted as proof of dishonesty. But when a business Government, headed by Herr Cuno, the able shipping man, came into office in 1922, there was no longer doubt in the minds of impartial observers that Germany was ready to consent to any practicable reparations program and to put her house in order so that it could be carried out. The new Cuno Government, backed by Germany’s leading industrialists, received the support of the people and was ready to talk business with the Entente Powers.