Discriminatory alteration of the capital tax is expected to be the next step in the anti-Jewish tax campaign. Commenting on the anti-Semitic trend of tax regulations, the Frankfurter Zeitung remarks significantly: “The application of the Nuremberg legislation to the tax laws is an important step in the reform of the Reich’s tax system.”
The form of alteration of the capital tax is not known yet. It is pointed out that it may involve a drastic revision of the rates, but more likely the extension of the new “Jewish child principle” already applied to income tax. If this principle is accepted, Jews will be unable to claim exemptions allowed at the rate of 10,000 marks for each child and each parent.
Thus, a married man with three children does not begin paying a capital tax until his capital is 50,000 marks. The present tax is one-half per cent. Under the law as revised in accordance with the “Jewish child principle,” A parent with three Jewish children would be allowed an exemption of 20,000 marks for himself and his wife. It is pointed out that unfavorable alteration of the capital tax would particularly affect a considerable number of Jews forced out of business and compelled to live on their savings.
LOSS OF CHILD EXEMPTIONS DOUBLES TAX FOR THOUSANDS
The full significance of last Saturday’s tax law changes, obscured by the Wilhelmstrasse developments of the weekend, is only at present becoming apparent. The fact is that henceforth the income tax burden for tens of thousands of Jewish families is more than doubled.
The new provisions are embodied in a lengthy technical revision of the general income tax regulations in which the phrase, Jewish taxpayer, is not mentioned. The most important provision is that henceforth no exemptions can be claimed in behalf of Jewish children. The effect of this is to force every Jewish taxpayer in any income group to pay the same taxes, regardless of the number of his child dependents.
In the 250-mark monthly income group, for instance, the tax is at present 14.3 marks per month, whereas formerly the father of three paid only 4.16 marks, the father of two, 7.80 marks, and the father of one, 10.92.
A second provision forces all persons over a certain age, who formerly were permitted to pay the “married rate” if divorced or widowed, to pay the “single rate” if they have a Jewish child. For example, a widower with one child earning 3,600 marks yearly used to pay 250 marks annually in tax. If the child is Jewish, he must now pay 563 marks.
A third provision limits the deduction from gross taxable income allowable for church taxes, Jewish or non-Jewish. It is pointed out, however, that this strikes hardest at the Jew, since Jewish religious taxes, because of Jewish communities’ widespread activities, are higher than the Christian taxes, representing twenty-five per cent of the tax paid to the State. Under the old law the full amount was deductible from gross taxable income. Under the new law, the deduction is limited to two per cent of the gross income. In many cases this lifts the taxpayer into the next higher tax-rate bracket.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
