Property freedom · scenario
Before income tax: how did the French state finance itself?
Explain fiscal history without myths: income tax created in 1914, other taxes existed before it, and World War I radically changed public finance.
France created the general income tax in 1914
The law of 15 July 1914 created income tax. But pre-1914 France already had major direct and indirect taxes, including the “four old contributions”.
Income tax did not single-handedly create French public debt
Finance Ministry historical work shows that belligerents financed World War I heavily through borrowing, opening a durable cycle of deficits, debt, monetary depreciation and inflation. A simple “income tax caused debt” claim would therefore be historically unsound.
Useful lesson
Compare the scope of the state, spending and taxation together rather than comparing one tax in isolation.