Robert Meyer on Constantin Frantz’s Die sociale Steuerreform (1882)

Robert Meyer’s 1882 review of Constantin Frantz’s Die sociale Steuerreform als die conditio sine qua non, wenn der socialen Revolution vorgebeugt werden soll assesses taxation as a means of preventing social revolution. He distinguishes the book’s force as political advocacy from its contribution to economic science. Principles already established in scholarship may still require extensive exposition for a wider public:

Es kann daher dem Werke nicht zum Vorwurfe gereichen, dass es wissenschaftlich bereits feststehende Sätze, die jedoch noch nicht zum allgemeinen Bewusstsein gekommen sind, mit ausführlicher Breite behandelt.

English translation: It cannot therefore be counted a reproach to the work that it treats at length propositions already scientifically established which have, however, not yet entered into general consciousness.

This distinction sustains Meyer’s qualified approval. He welcomes Frantz’s reforming purpose while testing his proposals against theoretical precedents and fiscal practice, particularly the work of Schäffle and Wagner.

Frantz’s opening diagnosis treats private property as a human institution susceptible to reform rather than an immutable natural or divine arrangement. Meyer finds little originality in the attacks on liberalism, stock-exchange speculation, and Roman law. Nevertheless, he endorses the moderate conclusion emerging from the polemic: liberal and socialist economics each grasp only part of the problem. Economic freedom and competition should remain, but the state should counter excessive inequalities. The underlying principle is the simultaneous individual and social character of property and income:

Es wird vielmehr auf ein System ankommen, welches von vorneherein mit vollem Bewusstsein den Doppelcharakter alles Eigenthums und Einkommens ins Auge fasst.

English translation: What will matter, rather, is a system which from the outset, with full awareness, keeps in view the double character of all property and income.

Meyer identifies this position with prevailing theory rather than with a discovery by Frantz. Taxation supplies the principal means of adjustment by connecting state action to the population’s economic circumstances. Frantz gives its social purpose priority over revenue collection without denying the advantages or possible necessity of consumption taxes. Two instruments, however, bear the immediate redistributive task:

Unmittelbar diesem Berufe dienen kann freilich nur die progressive Einkommen- und die Erbschaftssteuer.

English translation: Only the progressive income tax and the inheritance tax can, to be sure, serve this purpose directly.

Meyer becomes more critical when principles give way to design. Frantz proposes applying higher income-tax rates only to the additional income entering a higher band; Meyer observes that Austria had employed this principle since 1849. Allowances for debts and family circumstances likewise repeat familiar demands. More distinctive, and useful in Meyer’s judgment, is the proposal that percentage allowances should decline as income rises.

Differentiation by occupation proves less satisfactory. Frantz makes agriculture the baseline, favours learned professions and officials, and burdens industrial, commercial, and stock-exchange income more heavily. Meyer argues that varying income-tax rates does not adequately address problems that Schäffle and Wagner confront through combinations of existing direct taxes and a supplementary income tax. Converting land and building taxes into real charges while neglecting other direct taxes evades the institutional question. Reform must develop the existing fiscal system, not merely proclaim a fairer distribution of burdens.

Inheritance taxation receives a more favourable assessment. Frantz grounds it in the state’s right of co-inheritance, exempts small inheritances and inheritances passing to descendants, and distinguishes the deceased’s manner of acquisition from the composition of the estate. Meyer particularly values this last distinction. Despite Frantz’s claim to an independent foundation, the proposals largely converge with Schäffle’s. Income and inheritance taxation would furnish reciprocal checks, while revenue drawn from national capital would chiefly support municipalities or proposed occupational corporations, including housing provision.

The review then follows Frantz into the politics of implementation. Reform would require an alliance of the middle class and propertyless workers against plutocracy, potentially led by a forceful statesman. Meyer highlights the defence of public knowledge of income circumstances but rejects reliance on voluntary restraint in wealthy households’ consumption: the absence of such restraint is precisely what makes state intervention necessary.

Frantz’s opposition to the proposed German tobacco monopoly further reveals the political commitments shaping his fiscal programme. Alongside its regressive effects, he fears its contribution to imperial centralization; federalism and defence of monarchy inform his demand for social tax reform. Meyer separates these controversies from his economic judgment. He credits a scientifically informed partisan intervention, but finds no substantial advance beyond Schäffle and Wagner and a serious weakness in the treatment of existing direct taxes. His review affirms taxation’s social role while insisting that reform principles answer to theoretical precedent and institutional feasibility.