Le Nord : revue internationale des Pays de Nord - 01.06.1944, Side 284

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LE NORD
that constituted by the direct taxes of the preceding year. If
they have children, there is a further reduction (for three chil-
dren below 15 years of age thus in all 1500 Kr.). In the present
case the levying will consequently at most amount to about 21
and about 30 per cent. of the gross income.
So it is no wonder that the rule of deduction is popular,
particularly among higher tax-payers, who, indeed, thanks to it,
are safeguarded against having to pay an average of more than
50 per cent. of their gross income. It is not quite so highly
esteemed among experts on taxation, who characterize it as ir-
rational. As reasons for this they point to the greatly fluctuating
taxable income appearing when the gross income increases highly
from one year to another. To take the above used figures, he
who increases his income from about 15,000 to about 75,000
Kr. will have to pay a very high tax in the first year, as the
right of deduction only applies to the comparatively small amount
of tax paid on his previous income. In return he may the fol-
lowing year write down his income by the huge amount paid
by him the previous year. As the scale of taxation is highly pro-
gressive, the effect will be so considerable that his total expendi-
ture on direct taxes presumably decreases below half of that of
the previous year. This, again, leads to a rise in the following
year, as the amount to be deducted is now reduced correspond-
ingly, etc. etc.
It is difficult to illustrate the course of development during
the 40-years’ period, because a comparison of the rates of taxa-
tion income class by income class gives a misleading result. This
is due to the devaluation of money that has taken place in the
meantime, the result of which is that incomes of the same amount
cannot be compared. Gross incomes from recent years of e. g.
5,000, 10,000, and 50,000 Kr. should probably, if only we hark
back to the years immediately before the first Great War, be
reduced to respectively 2,000, 3,750, and 17,500 Kr. in order
to correspond to the price level of that time. If the calculation
is to refer to tax-payers of the same economic situation, the
amount of tax now paid on 5,000 Kr., should be compared with
that which at that time was paid on 2,000 Kr., etc. (an income
of that size had at least as great a purchasing power as that of
an income of 5,000 Kr. in our day). When this method is adopted
it appears that the difference between the rates of tax has in-
creased materially. For Copenhagen tax-payers the actual per-