by Massabuau in 1899.1 The lump-sum-income-tax idea was represented by the bills of Cavaignac in 1897 (but with the - partial use of the legal-presumption idea), of Klotz in 1898, and of Magniaudé in 1899. The schedule-income-tax projects were submitted in bills of Doumergue and of Guillemet in 1896. Finally the old idea of a general property tax was represented by bills of Linard and Mahy in 1896, of Rose in 1899, and of Menier in 1899. 2

The public was gradually being educated to the urgency of the question. During the nineties not only did official publications, like that of 1895, give the facts, but some of the parliamentary reports were republished for general circulation. Writers, like De Swarte in 1893, Philippe in 1894, Luçay in 1896, and Muller in 1901, went more or less fully into the history of the subject. The general literary discussion also waxed warm. Passing over the articles in the periodicals, we now find books devoted to the subject by Kergall, Doumer, Trouille and Philippe, as well as numerous pamphlets. But the economists as such were still opposed,

4

1 For these see Gaston-Gros, pp. 524-528.

2 For these various schemes see Renoult, pp. 72-75.

8 Cf. De Swarte, L'Impôt sur le Revenu: Historique et Législation Comparée. Paris, 1893; Philippe, L'Impôt sur le Revenu. Paris, 1894; Luçay, L'Impôt Général sur le Revenu, dans le Passé et le Présent. Paris, 1896; Miller, L'Impôt sur le Revenu et sa Législation dans les Divers Pays. Paris, 1901.

4 Among the most important articles may be noted: Gide, "La Psychologie et l'Impôt sur le Revenu," Revue a'Économie Politique, 1889; D. Davidson, "L'Impôt sur le Revenu," ibid., 1891; E. De Worms, "De l'Impôt sur le Revenu," Revue Politique et Parliamentaire, 1895; L. Arnaud, "L'Impôt sur le Revenu appliqué à Verviers," ibid., 1896; Abbé Ferret, "L'Impôt sur le Revenu," L'Association Catholique, 1895; N. Frederiksen, "Les Principes et la Pratique de l'Impôt Général sur le Revenu et la Propriété," Le Monde Economique, 1896; A. Liesse, “L'Impôt sur le Revenu et les Socialistes," ibid., 1896; H. Barbaux," De l'Impôt sur le Revenu à Florence au XVe Siècle," Revue Politique et Parlémentaire, 1898.

5 Kergall, L'Impôt Démocratique sur le Revenu. Paris, 1896; P. Doumer, L'Impôt sur le Revenu. Paris, 1896; E. Trouille, L'Impôt sur le Revenu. Paris, 1897; Ch. Philippe, L'Impôt sur le Revenu. Paris, 1898.

Cf. Le Projet d'Impôt sur le Revenu devant la Presse Économique et Financière, 1903; Rochard, Réforme Radical de l'Impôt par l'Adoption de l'Impôt sur le Revenu, 1894; Dupont, Le Projet d'Impôt sur le Revenu, 1896; Fouquet,

as can be seen from the title that Leroy-Beaulieu chose for his chief fulmination; while M. Jules Roche, then, as now, one of the uncompromising opponents of the system, published in 1896 a book in which he collected a large number of articles written originally for the Figaro, and in which he attempted to draw a warning lesson from the experiences of the ancien régime and the Revolution.2 The country was gradually waking up.

$7. From Caillaux's First Ministry to his Second,

1899-1907

With the new century the interest in the discussion grew in importance. Although the advocates of the income tax were still in the minority, their numbers augmented from year to year. In 1899, under the ministry WaldeckRousseau, M. Joseph Caillaux, who was destined in a second ministry ten years later to carry to successful completion an income-tax scheme, became minister of finance. A few months before his appointment, and while still a deputy, Caillaux had submitted, in March, 1899, in a committee report a project for an income tax very similar to that of Peytral, but combining declaration, official assessment, and the use of legal presumption.3 When he became minister, Caillaux introduced a bill for an income tax designed to replace the existing door and window tax, as well as the personnelle-mobilière. It was a combination of a direct income tax with one resting on outward presumptions. The bill,

L'Impôt sur le Revenu Global ou la Taille ressuscitée, 1897; Sarrault, L'Impôt Progressif sur le Revenu, 1898; Couron, L'Impôt sur le Revenu, 1899; Manchez, L'Impôt Général sur le Revenu, 1899.

1 "La Mystification du Projet d'Impôt Général sur le Revenu," L'Économiste Français, 1896.

2 Contre l'Impôt sur le Revenu. Par Jules Roche. Paris, 1896.

8 Gaston-Gros, p. 527.

Projet de Loi portant Réforme des Contributions Directes presenté au nom de M. Emile Loubet, Président de la République Française. Par M. J. Caillaux, Ministre des Finances, Chambre des Députés, Session de 1900, no. 1634, 106 pp.

however, did not find favor with the special commission charged to consider the scheme together with several of the other projects mentioned above. The commission was presided over by Rouvier, but the excellent report was written by Pierre Merlou, and leaned rather to the lump-sum idea.1 The budget commission of 1901 recommended, however, that some income-tax scheme be included in the budget of 1902, and a sub-committee was intrusted with the duty of working out a project for a progressive lump-sum income tax. But Caillaux was not ready for the scheme, and because of his opposition it was dropped.

After Caillaux's retirement from office the disinclination to anything looking like inquisitorial procedure became so strong that in 1903 Rouvier, who was then minister of finance, advanced an income-tax proposition based very largely on rentals.2 Rouvier, as minister, had changed considerably from Rouvier the deputy, who, it will be remembered, had introduced in 1874, and again in 1877, projects for a lumpsum income tax. He now found much to admire in the old system which he then so strongly opposed. The essential shortcomings of this entire theory, however, were emphasized by Poincaré, a little later, when he called attention to the fact that every such scheme that had ever been submitted to Parliament had suffered shipwreck because all the attempts had moved in the same vicious circle; 3 and Caillaux declared that there was no formula more false than that of legal presumption. It was precisely because the outward signs were

1 1 Rapport fait au nom de la Commission de l'Impôt sur le Revenu chargée d'examiner les Projets et Propositions de Loi portant Établissement d'un Impôt Général sur le Revenu. Par M. Pierre Merlou, Chambre des Députés, Session de 1901, no. 2365, 48 pp.

2 Projet de Loi portant Suppression des Contributions Personnelle-Mobilière et des Portes et Fenêtres et Établissement d'un Impôt Général sur le Revenu (renvoyé à la Commission de Législation Fiscale), presenté au nom de M. Emil Loubet, president de la République Française. Par M. Rouvier, Ministre des Finances. Chambre des Députés, Huitième Législature, Session ordinaire de 1903. Paris, Imprimerie Nationale, 1904, 36 pp.; and Annexe to the above, ibid., 1904, 157 PP.

3 Chambre des Députés, Seánce of July 12, 1906.

so deceptive that the whole question of French taxation was so unsatisfactory. The more radical members of Parliament, however, were ready to go further, and introduced bill after bill for a direct income tax. Thus, apart from the committee report of Merlou in 1901, special attention must be called to the schemes of Magniaudé and of Lacombe in 1902, and of Brun in 1903, while Maujan, with whom we have become acquainted above, came back to his favorite combination of a property and income tax in 1903, and again in 1904.2 All these bills were referred to a committee presided over by Merlou, which brought in a voluminous report, as well as a supplementary report, both written by Renoult. Nothing daunted, however, both Maujan and Magniaudé submitted new bills with still more vigorous exposés des motifs in July, 1906, and Malvy also added a new bill.

So pronounced, however, was the general trend toward radicalism by this time, that the government considered the time to have come for a determined forward step. In the election of 1906, 263 successful candidates had declared

1" Je n'hésite pas à dire qu'il n'y a pas de formule plus fausse que celle de l'impôt sur le revenu fondé sur les signes extérieurs. Ce dont on se plaint, ce qui fait condamner, par tous ceux qui savent ces questions, nôtre système d'impôts, c'est précisément qu'il repose sur des presomptions, sur les indices les plus decevants. Taxer les réalités directement mésurées, c'est la substance de la réforme. On ne fait rien, on propose de se traîner dans la même ornière quand on suggère de remplacer des impôts sur les signes extérieurs par d'autres impôts sur d'autres signes extérieures." See Gaston-Gros, p. 137.

2 Lacombe's scheme contains an interesting exposé des motifs. See Proposition de Loi ayant pour Objet d'établir un Impôt Général sur le Revenu. Presentée par M. Louis Lacombe, Chambre des Députés. Huitième Législature, Session de 1902, no. 13. Cf. also Gaston-Gros, p. 529.

3 Rapport fait au nom de la Commission de la Législation Fiscale chargée d'examiner le Projet de Loi et les diverses Propositions de Loi ayant pour objet d'établir un Impôt Général sur le Revenu. Par M. Réné Renoult. Chambre de Députés, Session de 1904 no. 1799, 161 pp.; and Rapport Supplémentaire fait au nom de la Commission de Législation Fiscale chargée d'examiner: 1° Les Projets de Loi portant Suppression des Contributions Personnelle-Mobilière et des Portes et Fenêtres et Établissement d'un Impôt Général sur le Revenu; 2° Les diverses Propositions de Loi... ayant pour Objet d'établir un Impôt sur le Revenu. Par M. Réné Renoult, Chambre des Députés, Session Extraordinaire de 1904, no. 2097, 16 pp.

themselves in their election platform for a direct income tax; 150 had stated that they believed in a radical reform of the existing system, and only 166 remained silent. In the new ministry formed by Clemenceau in October, 1906, the portfolio of finance was offered to Caillaux, who, it will be remembered, had occupied a similar position under the WaldeckRousseau ministry from 1899 to 1902. His immediate predecessor, Poincaré, had not been able to effect any agreement with the Budget Commission, and the new government was now called upon to fulfil its election promises. Caillaux had gradually solidified his opinions on the subject. Although originally in favor of an impôt indiciaire, he took strong ground, in criticising Rouvier's plan several years later, against the system of legal presumptions, and expressed his preference for the British system.1 As early as 1899 he had manifested his repugnance to the German system. "Let us hasten to state," said he, "that in theory the German income tax is almost perfect. Unfortunately, the weak spot is precisely this ideal mode of assessment - the declaration which in practice leads to the most unsatisfactory results." 2

In a public speech of April, 1906, while still a deputy, Caillaux clearly explained his present views, and this speech led Clemenceau to offer him the portfolio. "We must not think," said Caillaux, "of replacing the direct taxes only in part. If we were to touch one or two, all would crumble. What is necessary is their entire renovation. We must understand that taxes founded on external signs of wealth, on the system of presumptions, have had their day; that their injustice condemns them, and that we must replace them by taxes on actual income or on capital, in part on one, in part

1 Une Transformation Sociale. Mr. Caillaux et L'Impôt sur le Revenu expliqués. Par Geraud-Bastet, Paris, n. d. [1909], p. 103. This book, which contains a schedule of Caillaux's career leading up to the passage of the incometax law, will hereafter be quoted as Géraud-Bastet.

...

2" Empressons-nous de constater que, en théorie, l'impôt sur le revenu allemand est presque parfait. . . . Malheureusement la pierre d'achoppement, c'est precisément ce mode d'assiette idéal (la déclaration) qui, dans la pratique, conduit à des résultats les plus mediocres." - Quoted in Gaston-Gros, p. 286.