Erzberger Reform

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The Erzberger financial and tax reform of 1919/20 is considered to be the most extensive reform work in German tax and financial history. Their goal was a complete reorganization of the financial constitution and the tax system in the German Reich . A centralization of the financial administration as well as a uniform tax collection was to be realized by means of 16 new Reich tax laws. The reform , named after the then Reich Minister of Finance Matthias Erzberger ( center ), has significantly shaped the German tax system and tax law up to the present day.

Starting position before the reform

Until 1918, every town and municipality in the federal states of the German Reich was independently responsible for the administration and collection of taxes within the framework of the rules and principles of the German Customs Association . This federalism was a cornerstone of the German Empire . Calls for a centralization of financial administration arose early on, but were unthinkable and indisputable for Bismarck and the emperors. This was a basic requirement of the individual accession states when the Reich was founded in 1871 , which remained untouched by all subsequent Chancellors until 1918 .

The precedence of the Federal Council over the Reichstag and the fact that the Reich financed itself exclusively from member contributions and tariffs , i.e. taxes primarily levied on companies on the import, transit and export of goods, testify to the strong position of the member states in the German Empire were. The state gained considerable resources, particularly through the tariffs, and at the same time wanted to protect domestic companies from foreign competition.

Between 1871 and 1914 the German Empire developed into one of the leading export nations. A year before the outbreak of World War I , it was able to account for 13% of world trade, overtaking the USA and only two percent behind Great Britain. The development of imports was similar: by 1914, the German Reich obtained around 1/3 of its food from abroad and was the world's largest importer of agricultural products. After the outbreak of war, imports and exports came to an almost complete standstill due to the British naval blockade in the North Sea . In addition to considerable economic restrictions, this led to a drying up of the main sources of tax income.

After the war, Germany had to open its market, reduce tariffs and unilaterally grant most-favored nation treatment to the victorious powers for five years . These trade policy restrictions and the simultaneous reparation payments made it impossible for the empire to pursue an active customs policy. Under these conditions, a centralization of the financial administration seemed inevitable for several influential politicians .

Implementation of the reform

Development of the Reich Finance Administration from 1920 to 1926

Accordingly, with the establishment of the Weimar Republic, a uniform Reich finance administration was sought and implemented.

At the beginning of February 1919, the Reich Ministry of Finance was set up with the simultaneous establishment of 26 state tax offices, around 1,000 tax offices and around 200 main customs offices. Around 12,000 officials from former federal institutions were able to be taken on for this purpose. However, this staff was by far not enough to cope with the work. Around 18,000 additional skilled workers were trained and hired, so that at the end of the restructuring a total of around 30,000 people were employed in the new Reich Finance Administration.

To legitimize these measures, the law on the Reich Finance Administration and ordinances on the district division of the state tax offices and tax offices came into force in September 1919 . The establishment of the state tax offices was of particular importance for the success of Erzberger's reform, because they were the authority with which the Reich finance administration penetrated the previously existing self-government of the states and municipalities . Specifically, the Reich Ministry of Finance, as the top management of the tax administration, formed the top of the new three-tier administrative system. This was followed by the newly created state tax offices, which were supposed to ensure the uniformity of taxation. Although the name suggests this, the state tax offices were neither independent nor federal state institutions. They formed the middle level of the Reich Finance Administration and were directly subordinate to the Reich Ministry of Finance. At the third level, the base, were the newly established tax offices in each district town . They were responsible for the practical implementation of the new laws, i.e. setting, collecting and collecting taxes.

A total of 16 finance and tax laws came into force during Erzberger's tenure. In addition to the centralization of financial administration, uniform taxes were levied across the empire , for example luxury sales tax , sales tax , inheritance tax . The basis of all taxes was the new Reich Tax Code .

A completely new addition was the sales tax , which was previously unknown in the tax system. However, income tax was of particular importance . Its main function was to meet the empire's enormously increased financial needs. While in the German Empire the income tax levied by the states and municipalities comprised a maximum of 4%, it has now risen to a maximum top rate of 60%. The wage tax card and direct wage tax deduction were introduced for collection purposes. One of the most controversial taxes was the Reichsnotopfer .

Effects

The constitutional position of the Reich Minister of Finance and his political power was enormous. Ernst Troeltsch called Erzberger the "secret chancellor". The finance minister commanded more than 80% of the total tax revenue and was the employer of the civil service at all three administrative levels. After the imperial budget regulation , which was introduced under pressure from the victorious powers , his influence increased even further: together with the imperial chancellor, he was then entitled to an absolute veto on all expenditure issues and budgetary matters.

This concentration of power inevitably led to dissonance and resistance in the federal states and municipalities. As a result of the reform, the traditional structure of self-government experienced profound changes; it made states and municipalities largely dependent on tax allocations. With the state tax law of March 30, 1920 , the first adoption of special financial equalization legislation, they finally lost their previous tax sovereignty. This was possible, among other things, because Erzberger had offered former state finance ministers, who were critical of the centralization of the financial administration, if the bill was approved, to make them presidents of the state tax offices for life, whereby they would receive the salary of a state minister - an offer open to all Addressed agreed.

It goes without saying that Erzberger created many opponents with his great reforms. Regarding the necessity, he had to emphasize again and again in 1919 that the financial needs of the Reich had increased by over 900% compared to the last pre-war years. After his resignation as finance minister on March 12, 1920, Erzberger himself was no longer able to work in the interests of his reforms. The already considerable resistance from all parts of the population during his term of office soon led to corrections. The protest was mainly directed against the strong tax progression . There was flight of capital and tax evasion . In addition, the inflation process, especially the hyperinflation of 1922/23, ensured that the measures set out in the reform did not take full effect. With the tax reform of 1925 , various components of the Erzberger reform were reversed and some tax rates were lowered.

Review

The Erzberger Reform of 1919/20 is one of the most important reforms in German history. In less than nine months, the legal basis for a new financial and tax system was created. The new imperial tax laws brought a nationwide standardization of the previously considerably fragmented tax law. At the same time, they caused a sharp increase in taxes. Their fiscal success was badly affected by inflation.

The justification put up for discussion by various sides that the immense indebtedness of the German Reich from the First World War and the high internal and external costs resulting from the war forced a complete restructuring of the financial administration and the tax system is being questioned in recent research by leading historians. With this attempt at justification it is unclear why, after the end of the financial crisis, the further expansion of a central tax bureaucracy and the continuation of the collection of various taxes would be necessary. Rather, Erzberger's reform represents the historically strongest encroachment on the statehood of the German states. Erzberger was in fact aware of the scope. He made repeated official statements on his reform to the delegates of the National Assembly as follows:

"I am clear about this and also want to create clarity: The implementation of the Reich's own tax organization will represent the greatest step towards building the German national unified state."

The tax and financial reforms of 1919/20 thus formed the prelude to the dispute over the further development of the Reich-Länder relationship , which became a permanent constitutional issue in the Weimar Republic and ultimately ended in 1933 in the laws on bringing the Länder into line with the Reich . Erzberger himself lost the support of his own party by March 1920 at the latest because of his uncompromising Unitarian attitude, the German Center Party dropped him and paid for the creation of the centralized Reich finance administration by splitting off the BVP .

The reform has influenced the basic structure of the German tax system and tax law up to the present day. With it began in Germany not only the development of the modern tax and customs administration, but also the tax advisory profession and tax sciences.

See also

literature

  • Peter-Christian Witt: Reich Finance Minister and Reich Finance Administration 1918–1924. In: Vierteljahrshefte für Zeitgeschichte , 23rd year 1975, issue 1 (January 1975) ( online as PDF; 5.54 MB)
  • Heinz Zielinski: Local self-government and its limits. About the influence of the state and the economy on the communities. Campus-Verlag, Frankfurt am Main 1977, ISBN 3-593-32240-4 . ( Dissertation , University of Giessen , 1975)
  • Heinz Zielinski (Ed.): Local politics between independence and state dependence. Empirical analyzes of scope for action, regional reforms and self-administration. (= Social science studies on urban and regional politics , Volume 13.) Hain, Königstein am Taunus 1980, ISBN 3-445-01987-8 .
  • Adolf M. Birke , Magnus Brechtken (ed.): Local self-government. History and the present in a German-British comparison. Saur, Munich 1996, ISBN 3-598-21413-8 . (as a new online edition: De Gruyter, Berlin / Boston 2013, ISBN 978-3-11-187019-9 .)
  • Wolfgang Michalka (Ed.): Matthias Erzberger. "Reich Minister in Germany's most difficult time". Verlag für Berlin-Brandenburg, Potsdam 2002, ISBN 3-935035-32-2 .
  • Michael North (ed.): German economic history. An overview of a millennium. 2nd edition, CH Beck, Munich 2005, ISBN 3-406-50266-0 .
  • Michail Krausnick, Günter Randecker: Matthias Erzberger. Bankruptcy administrator of the empire and pioneer of democracy. Edition Durchblick, Neckargmünd / Books on Demand GmbH, Norderstedt 2005, ISBN 3-8334-3586-0 .
  • Rainer Wernsmann: Behavioral control in a rational tax system. Mohr Siebeck, Tübingen 2005, ISBN 3-16-148459-2 . ( Habilitation thesis , Westfälische Wilhelms-Universität Münster , 2003)
  • Jan P. Wildberger: The social thought in the Erzberger financial reform. P. Lang, Frankfurt am Main et al. 2000, ISBN 3-631-34733-2 . (Dissertation, University of Frankfurt am Main , 1998)
  • Carsten Burhop: Economic History of the Empire 1871–1918. Vandenhoeck & Ruprecht, Göttingen 2011, ISBN 978-3-8252-3454-6 .
  • Günter Ederer: Dream on, Germany! Politically correct against the wall. 2nd updated edition, Heyne, Munich 2013, ISBN 978-3-453-60255-7 .
  • Günter Püttner: Handbook of municipal science and practice. Volume 1: Fundamentals and municipal constitution. 3rd edition, Springer, Berlin / Heidelberg 2007, ISBN 978-3-540-23793-8 .
  • Dietmar Wellisch: Finance II. Theory of taxation. Vahlen, Munich 2014, ISBN 978-3-8006-2501-7 .

Individual evidence

  1. ^ A b The Erzberger Finance and Tax Reform and the Weimar Republic , Federal Ministry of Finance, December 9, 2010
  2. ^ Cornelius Torp: The challenge of globalization: Economy and politics in Germany 1860-1914. Vandenhoeck & Ruprecht 2005; P. 62 ff.
  3. ↑ ibid.
  4. ^ Carsten Burhop: Economic history of the empire 1871-1918. Vandenhoeck & Ruprecht 2011; P. 194 ff.
  5. ^ Willi Albers: Concise Dictionary of Economics: Economy and Politics to Zölle, Vol. 9. Vandenhoeck & Ruprecht 1977; P. 657
  6. ^ Christiane Kuller: Bureaucracy and Crime, Anti-Semitic Financial Policy and Administrative Practice in National Socialist Germany. Walter de Gruyter 2013; P. 34 ff.
  7. ↑ ibid.
  8. ^ A b c Martin Junkernheinrich, Stefan Korioth, Thomas Lenk, Henrik Scheller, Matthias Woisin: Yearbook for Public Finances 2009–2015. BWV Verlag 2015; P. 293
  9. ^ Heinrich August Winkler: Weimar, 1918-1933. The history of the first German democracy. Munich 1993; P. 92 ff
  10. ↑ Eberhard Kolb: The Weimar Republic. Oldenbourg Verlag 2002; P. 40
  11. ↑ Joe Weingarten: Income tax and income tax administration in Germany: A historical and administrative overview. Springer-Verlag 2013; P. 170
  12. ^ Günter Püttner: Handbook of municipal science and practice: Volume 1: Basics and municipal constitution. Springer-Verlag 2013; P. 90 ff.
  13. ↑ Joe Weingarten: Income tax and income tax administration in Germany: A historical and administrative overview. Springer-Verlag 2013, p. 133
  14. ^ Christiane Kuller: Bureaucracy and Crime: Anti-Semitic Financial Policy and Administrative Practice in National Socialist Germany. Walter de Gruyter 2013; P. 38
  15. ↑ ibid.
  16. ↑ Reiner Sahm: To hell with the tax. Springer-Verlag 2012; P. 272
  17. ^ Heinrich Becker: Scope of action of agricultural policy in the Weimar Republic between 1923 and 1929. Franz Steiner Verlag 1990; P. 241
  18. ^ Jan P. Wildberger: The social thought in the Erzberger financial reform. P. Lang 2000, p. 10 ff
  19. ↑ Wolfgang Benz : Southern Germany in the Weimar Republic: A Contribution to German Domestic Policy 1918-1923. Duncker & Humblot 1970; P. 185 ff
  20. ↑ Franz Menges : Reichsreform und Finanzpolitik .: The erosion of the statehood of Bavaria through financial policy in the time of the Weimar Republic. Duncker & Humblot 1971; P. 210
  21. ^ Claus-Dieter Krohn, Corinna R. Unger: Arnold Brecht 1884–1977. Franz Steiner Verlag 2006; P. 64
  22. ↑ Georg May: Ludwig Kaas, the priest, the politician and the scholar from Ulrich Stutz's school, volume 34. John Verlag BR Grüner 1982; P. 196