1914

Introduction of income tax in France

Income tax was introduced in France as part of the government’s strategy to raise finance by increasing taxes on wealthier households. It was the second major progressive tax to be levied in France, after the progressive tax on inheritance introduced in 1901.

The idea of an income tax was first put forward in 1869 by Leon Gambetta, with the support of the Radical Party. His aim was to ease social tensions by reducing the powers of the owners of means of production.

From 1894 onwards the proposal was put forward repeatedly by various finance ministers, but was systematically rejected by the lower house of parliament, the National Assembly. Its opponents argued that it was a confiscatory tax that would discourage savings and therefore investment.

In 1909, Joseph Caillaux, finance minister in Georges Clemenceau’s government, managed to get the bill passed by the Assembly. But it would be another five years before the upper house, the French Senate, gave its approval, under pressure to raise funds to rearm the country in the face of the war threat. The Senate passed the bill on 3 July 1914, four days before the assassination of Archduke Franz Ferdinand in Sarajevo.

Income tax was introduced in 1842 in the United Kingdom, in 1893 in Germany and in 1913 in the United States.