Eugen von Böhm-Bawerk · 1882
Böhm-Bawerk’s 1882 review assesses Albert E. Fr. Schäffle’s 1880 study of tax policy and unresolved financial questions in Germany and Austria. Moving from the obstacles to fiscal reform to a survey of the book’s five sections, it commends Schäffle’s combination of scientific insight, political independence, and practical judgment.
The opening frames fiscal pressure as a mismatch between expanding public responsibilities and inherited revenue systems. The modern state and developing local self-government need resources that antiquated, inequitable taxes, compounded by public debt, struggle to provide. Yet the urgency of reform does not make agreement on its direction easier.
Welches System von Steuern das beste sei, darüber ist die junge Finanzwissenschaft selbst nicht einig.
English translation: As to which system of taxes is the best, the young science of public finance is itself not agreed.
Theoretical uncertainty is only one obstacle. Administrative conservatism impedes change, while reform’s association with the governing authorities brings partisan conflict into questions of fiscal design.
Das hat die unliebsame Folge, dass gewöhnlich — bewusst oder unbewusst — der sachlichen Gegnerschaft der Reform auch noch die politische Gegnerschaft der Regierung zuwächst.
English translation: This has the unwelcome consequence that usually — consciously or unconsciously — the political opposition to the government is added to the objective opposition to the reform.
Böhm-Bawerk thus distinguishes objections to a proposal from opposition to its political sponsors. Stronger still, however, is the resistance generated by the redistribution of burdens.
Endlich — und so bedeutend die beiden ersten Momente sind, so schätze ich doch dieses dritte für das stärkste — endlich ruft jede, auch die gedeihlichste Reform eine Menge verletzter widerstrebender Interessen in die Action.
English translation: Finally — and significant as the first two factors are, I nevertheless regard this third as the strongest — finally, every reform, even the most salutary, calls a host of injured, resisting interests into action.
Material interests influence even sincere convictions, obstructing consensus independently of a reform’s merits. Austria’s prolonged financial difficulties provide the immediate background to this diagnosis; Germany is beginning to confront comparable problems.
Against these impediments, Böhm-Bawerk values Schäffle’s expertise and independence from party commitments. He distinguishes Schäffle’s openness to a different future social order from proposals designed for existing institutions. Opposition to excessive progression in taxing large incomes and advocacy of worker-funded insurance without state subsidies exemplify this practical moderation. On the latter issue, the reviewer observes that German governments have adopted a more socialist position.
The survey of the book follows the connection between fiscal principles and institutional arrangements. The first section combines basic tax concepts with an assessment of European finances, conflicts over tax burdens, and Austria’s deficit. After feasible savings, Schäffle estimates a remaining deficit of roughly 15–20 million. Böhm-Bawerk accepts his higher estimate of national income as grounds for expecting better-regulated taxation to produce additional revenue.
The second section develops the central reform mechanism: coordination between taxation of persons and taxation of income sources. Existing yield taxes should become assessments of individuals’ net receipts from particular sources, supplying both components and evidence for a general personal income tax. Merely adding an income tax to unchanged yield taxes would retain unequal burdens and leave income inadequately established. Reform therefore requires an integrated assessment structure, not simply another levy.
The third section examines indirect taxation, distinguishing consumption taxes from taxes collected as fees. Schäffle favours easing burdens on necessities, rejects railway and transport taxes, and seeks additional revenue from selected commodities. He supports inheritance and gift taxation and levies on gambling and windfall receipts, while criticizing many existing fee-taxes. His qualified acceptance of a stock-exchange tax, without expecting much from its introduction, illustrates the distinction between a defensible measure and a productive revenue source.
The fourth section addresses the distribution of revenue among levels of government. Schäffle rejects both unchanged local surcharges and a rigid assignment of separate tax categories to different jurisdictions. The fifth connects fiscal reform with social and international economic policy, including workers’ insurance and protective tariffs.
The review concludes by praising the book’s factual resources, unity of argument, and attention to implementation. Böhm-Bawerk neither undertakes exhaustive criticism nor endorses every proposal. His favorable judgment rests on Schäffle’s ability to connect general principles with plausible means of execution. Read alongside the opening account of resistance to reform, this emphasis makes practical feasibility a central criterion of successful financial science.
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