THE POLITICS OF TAX REFORM IN FRANCE, 1906-1926

The importance of taxation to the functioning of any state makes the study of the reform of French taxes in the early 20th century an important means of examining the nature of the French Third Republic and the relationship of state and society in Western nations.;The study of tax reform does not demonstrate the existence of the consensus some have seen in French society on the limitation of social and economic modernization. It does, however, show that there was a virtual consensus on the need to protect taxpayers from state authority, and that this resulted in the protection, not only of the wealthy, but also of many traditional elements of French society. The study also shows that political alignments were crucial for the way the political system dealt with fiscal questions, and that the decisive period for these alignments was the decade before World War I, when the attempt to shift away from old alignments achieved only partial success. Finally, the history of tax reform shows that the French state and political system did not fit either the pluralist model of equal competition among interest groups or the marxist model of direct capitalist control. Instead, the state had considerable autonomy, but was constrained by the nature of the society and economy in which it operated.;The upper classes strongly resisted efforts to replace the existing regressive and unequal taxes with an income tax, which they regarded as the first step toward a socialist attack on property. This resistence was made more effective by the fears, shared by peasants and shopkeepers as well as the rich, that income tax would lead to "inquisition" by tax assessors into taxpayers' personal financial affairs. Action on tax reform was also hampered by the organization of political parties and alignments around other issues, making a clear confrontation on tax reform difficult. Attempts to create new alignments in 1913-1914 were only partially successful, but the pressures of armament and war forced passage of somewhat weakened income tax laws in 1914 and 1917. Continuing financial problems and the weakness of the income tax laws led to the passage of sales tax in 1920, but this was not enough to prevent a financial crisis in 1924-1926.