The Problem of Double Taxation

Abstract

DOUBLE TAXATION or, to be more accurate, Multiple Taxation explains itself. It is not, therefore, necessary to give a very elaborate account of the nature of the problem. To put it simply, it is the unfortunate position which befalls a man-or a corporation-who has to pay taxes in two or more countries in respect of the same income, or of the same property. An Englishman lives in France upon an income which he derives from England: this happy citizen will have to pay income tax on such income first of all in England, and secondly in France. This is a simple case of Double Taxation. Should this Englishman die domiciled in France, leaving some property in England, his next of kin will have to pay death duties both in France and in England upon such property. This again is Double Taxation. And the injustice of such procedure seems to me, in this last case, to be as great as in the first one, although it does not appear to have either attracted (at any rate to the same extent) the attention of the international lawyers or raised the wrath of the parties concerned. Historically, the problem of Double Taxation is not a new one; and it may be observed that the share which the Governments of to-day deduct from the earnings or capital of foreigners, irrespective of the deduction already effected by the latter's national Government, large as it may be, is still reasonable when compared with the ruthless confiscation which was the usual practice in times gone by. Take, for instance, what happened in France in the Middle Ages. The mere fact that the foreigner had remained more than a year within the territory of the Kingdom was sufficient excuse to enable the Lord of the Manor whereon he had settled to claim him as his serf, and to confiscate his income in his lifetime and his capital at the time of his death. Later, foreigners were allowed to remain as free men, but wer'e subject to heavy special rates and taxes. When the general condition of feudalism disappeared and was replaced by the monarchy, the kings lost no