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Stamp Taxes


§ 280. The stamp fee, says K. H. Rau' has been pretty gen erally adopted on account of the ease of collection and superin tendence. It is based on a legislative requirement that stamped paper must be used for certain documents, the price of the paper being fixed according to the nature of the document to be 3 Finanzwissenschaft (1865), sec. 231.

inscribed on it, and the absence of the stamp affords an obvious evidence of the evasion of the law the instant the document comes under the eyes of a government official. All transactions, as Rau goes on to say, which necessitate a written record, can therefore be subjected to the stamp duty, and fees exacted on a great variety of occasions can be collected in this form . . . . Latterly the adhesive stamp adopted in the letter-post has also been made use of for collecting this fee in cases where, for any reason, the stamped paper is not obtainable, or at any rate has not been used ; and this is something of a relief.

With complete naivete Cameral Science here records a pas sage of financial history, and then reproduces as part of its " Fundamental Principles" something that went to make up the elements of a bygone political and fiscal system.

It is Rau himself' who lays stress on the difference between the Fee [Gebahr] and the Tax, characterizing the fee as the "accompaniment of an act of government," an act "which would be no less necessary even if no particular payment were demanded for it, so that it can evidently not be regarded as performed in consideration of the payment." Now, this conception of the fee cannot be reconciled with the discussion of the stamp fees just cited unless we accept as a reality the pretense of a govern mental act with which the old fiscal methods disguised the stamp tax. But just how there can in reality be any governmental act concerned in the fact that stamped paper is used for certain documents between private individuals is not comprehensible. What we have to do with is certain transactions on the part of private persons, to which the only relation the government bears is that of collecting a tax, using for the purpose the convenient form of the stamp. The pretense was less transparent in the cases where the government, with some additional inconvenience to all concerned, added its stamp to the document after it was completed, in order to keep a public register of such instruments (as was the case in Piussia with respect to bills of exchange and the like, even during the last fek decades). But this pretense Sec. 227 ; cf. sec. 86 of his Finanzwissenschaft.

has latterly had to make way, as being a useless burden both on the government and on the individuals, and its place has been taken by the simple accepted expediency of the stamp, a fact of which even Rau was aware.

The stamp honestly confesses that it is nothing more than a useful form of taxing certain objects, or of collecting fees from objects which have no intrinsic connection whatever with the " fee." Being a piece of paper, it is well adapted for objects which are in the form of a piece of paper, or are wrapped in paper—for documents as well as for playing cards, for instru ments of exchange as well as for articles of consumption. It may serve for the collection of fees as well as for the collection of taxes.

§ 281. The stamp-tax was invented, according to Beckmann in the country in which everything used by a man is taxed, that is to say in Holland. The view that something similar was in use under the later Roman Emperors, rests on an erroneous read ing of a passage in the text of a law.

It was first introduced by an Act of August 13, 1624. The States General had offered a large reward for the invention of a new tax which would not press heavily on the inhabitants, and at the same time yield a large revenue to the republic ; an ingenious man invented the impost van bezegelde brieven,' to which the prize was awarded. No petition was to be enter tained by the government or by any official, national or municipal, which was not inscribed on stamped paper ; no legal document, no receipts or other documents were to be written by notaries, attor neys, etc., no papers of any kind whatever were to be recognized as evidence in court, unless a certain sum had been paid under the name of a stamp tax, varying with the kind and value of the article in question. In justification of the tax it was recited that its amount in any individual case was insignificant, that the poorer classes of the people were almost entirely exempt from it, and that the well-to-do burghers would pay a considerable reve nue to the state on account of their frequent need of using stamped paper.

According to Adam Smith there is no art which one gov ernment more quickly learns from another than the art of draw ing money out of the pockets of the people. Agreeably to this maxim we find that the stamp taxes spread from Holland over the whole of Europe within a hundred years. They were introduced into England by a law of Charles II. (1671),' and their amount by the time Smith wrote was so great that he says it exceeded the total national revenue under the government of William and It is to be remarked that he recognizes that the stamp tax is but a form under which a variety of essentially different taxes are levied. He declares, for example, that the stamp tax on cards, dice, newspapers and the like "are properly taxes upon consumption." In France a regulation was published in 1657, and repeated in 1674 under Colbert, regulating the stamping of tinware, which was to prevent the use of a fraudulent material in the ware, but which also confessed to a fiscal aim, inasmuch as "the great expenses of the war necessitate the finding of extraordinary means of Stamp taxes were introduced into Germany in 1682. They were introduced about the same time into the electorates of Sax ony and For the present purpose we shall have to be satisfied with reviewing the stamp tax legislation of Prussia of March 7, 1822, which was adopted in connection with the reorganization of the rest of the tax system, and we shall then be in position to make a very interesting comparison of this with the French legislation.

§ 282. The centre of gravity in the stamp duties, considered as a tax, lies in their imposition on commercial transactions and other similar transactions in business.

Prominent among the objects of taxation, from very early times, has been real estate, which in the early stages of economic development was the chief, and still continues to be the most obvious form of property. By prescription of custom real estate was bought and sold in a public way ; the assistance of governmental officials at these transactions afforded an equitable claim to the collection of fees and a plausible justification for a heavy tax. Taxes of this kind in individual cases have not only risen to a great height earlier than other taxes, but they have also maintained themselves intact down into the present, as, for example, is the case with the Enregistrement in France.' This class of taxes were less productive of results when applied to movable property, the taxes on such objects reaching a high rate only in early times, while in later times it has been sought to meet the necessities of business and to obtain an appreciable revenue (if at all) by imposing a moderate rate.

Under the Prussian law of March 7, 1822, at the purchase and sale of real estate the notarial publication of the transaction is made the occasion for collecting a stamp tax amounting to one per cent, of the purchase price ; in case of a sale of chattels, if the sale is concluded by means of a formal contract, one third of one per cent. is collected ; in case of leases the like proportion of the value of the usufruct contracted for is collected.

In case of inheritance no tax is levied on the transmission of property to descendants or ascendants, whereas on inheritance by less immediate relatives a percentage is collected which rises by gradations from one to eight, according to the remoteness of the degree of relationship. The tax on inheritances and legacies is collected by means of a stamp which is required by the court before whom the partition of the estate takes place.

Where no judiciary assistance is exercised the heirs are required to make the payment directly to the tax officials.

The element of the fee falls very much into the background in this class of stamp duties, but it comes into prominence in cases where the tax is not only paid in return for an official act which serves the interest of the private individual, but where the amount of the tax is, at the same time, sufficiently inconsid erable to correspond in some measure to the effort put forth by the official.

This character belongs to the stamp duties on transactions in writing which take place between officials and private individuals in the interest of the latter : applications, petitions, complaints, etc., on the part of private individuals ; advice, certificates, decisions, decrees and judgments on the part of the officials. The greater part of these dues consists of court fees.

The usual minimum of the stamp duty is one-sixth thaler on all papers presented by private individuals, and one-half thaler on each official communication (in matters of slight consequence not over one-sixth thaler, and in matters involving less than fifty thalers, nothing). The costs of litigation are fixed according to the value of the object in litigation : one per cent. on the first thousand thalers, one-half per cent. on 1000-20,000 thalers, one sixth per cent. on any sum exceeding 20,00o thalers. For decisions in courts of higher instance, one-sixth of the charges of the court of first instance is collected.

The income from the stamp tax in Prussia amounted, in 1823 1828, to an average of 2.75 million thalers, in 1829-1834, 3 mil lion thalers, in 1835-1838, 3.5o million thalers. Of this, the stamp on sales of real estate paid 900,00o thalers (1835-1838). A small amount was derived from the stamp on drafts (77, 000 thalers). Not inconsiderable were the consumption taxes levied in the form of a stamp tax, especially that on playing cards (levied under the form of a monopoly until the Act of June 16, 1838) which for the years 1835-1838 yielded, on an average, 165,345 thalers ; also the newspaper stamp tax, 47,736 thalers, the almanac stamp, 43,932 thalers.

The later development of the stamp-tax legislation in con nection with the general tax legislation of the German Empire is to be traced in a later portion of the present work.' It can only be mentioned here that the stamp tax on bank paper paid in Prussia is set down in the estimates of the Imperial Treasury for 1889-90 (based on the average of the years 1885-1888) at 3.50 million marks; that, further, the stamp on playing cards yielded .75 million marks, court fees 43 million marks (including 7 millions from the stamp tax), the inheritance tax 7 millions, the stamp tax 18.5o million marks ;' besides which the Empire col lected, in round numbers, 20 million marks from stamp duties on securities, brokers' certificates, bills and lottery tickets (under laws of July 1, 188i, and May 29, § 283. In France the field of stamp duties has habitually yielded a rich, and, in some portions, an astonishingly large revenue. The blending of the element of fees with that of taxation in this class of taxes is in that country not only an inheritance from the old political system which consistently avoided letting the sub jects see the tax in its true character, and sought to give it such a form as to preserve the appearance of an individual equivalent for each particular payment ; this ,method is no less in con sonance with the new political system of the French, which preserves an individualistic character wherever it makes a direct demand on the citizens, and so reduces the tax to the position of a schedule of payments for the cost of production of the public services.4 At the head stand the Registration Dues (droits d' ettregistre »tent), which were re-established by the law of December 19, 1790, and definitely reorganized in their general features by the law of December 12, 1798. Then there follow the stamp duties in the narrower sense (droits de timbre), recast by the laws of 1790-91, and established on a permanent footing by a law of November 13, 1798. Finally there are the Recorder's Fees (droits de greffe), the main law dealing with these being dated March II, 1799. A great number of laws and regulations have effected changes in these during the course of the nineteenth century.

In this field, as in the political system generally, the point of departure for the legislation has been the earlier institutions. Except for this continuity of development, the great compass of this taxation and the relative ease with which it is borne would scarcely be comprehensible.z The old droits de controle, the origin of which is traced back to Henry III., were, as the droits d' enregistrements have been since 1790, an impost on all legal transactions performed with or with out the cognizance of the courts. These acts are now classed under three heads according to their character, one class being subject only to a fixed tax, the second class subject to a gradu ated fixed tax, and the third class subject to a tax proportioned to the value involved. The two former approach the character of fees, and are of slight fiscal consequence relatively to the degree of their interference with business and to the income yielded by the proportional tax, the latter being of greater financial consequence. This latter tax is levied on documents and on events which confer rights of property or ownership ; the revenue derived from it amounts (1886) to 413.50 million francs, of which 200 millions come from the tax on inheritances and donations, 139 millions from the tax on sales of real estate, 56 millions from the tax on leases, rentals, evidences of debt, etc. The average rate of taxation of inheritances and dona tions (ranging from one to nine per cent., the lowest rate men tioned falling on the nearest degrees of kinship) is 3.13 per cent.; the average rate on the value of real estate is 6.61 per cent.' We have here a falling heavily on property, and so serv ing to make good the absence of income and property taxes which is characteristic of the French tax system. It serves this purpose in a somewhat dubious fashion, but quite effectively as judged by results. There is this to be said in its favor, that it is levied in a relatively more agreeable and therefore less oppressive form than the income and property taxes, to which the French char acter seems to harbor an antipathy.

The stamp dues proper, which are by principle levied on all papers used for business or legal documents, are classed as dimen sion stamps (according to the dimensions of the stamped paper), proportional stamps (increasing in proportion to the value of the objects), stamps of fixed value. The latter have been developed especially during the last generation and are attached to a great variety of commercial papers (receipts, brokers' cer tificates, checks, freight bills, insurance policies and the like). Drafts and securities, on the other hand, are subject to the pro portional stamp, which amounts to one-half per mille on drafts and similar papers and yielded (1886) 14 million francs ; on securities (stock exchange papers) it is imposed as a tax on their issue (one per cent. of the face value), and yielded 20 million francs. The aggregate revenue from stamp dues was 156 million francs.

As a third class there is to be added to the preceding the droits de tree (recorder's fees). These are payments for the services of the Recorder, and are therefore of the nature of fees (1886, 8 million francs); with these are to be classed mortgage fees (1886, 5.68 millions).

The growth of this class of taxes, which are of so great importance to France (and so instructive for other states), is shown by the following figures :

tax, fees, thalers, million and paper