[...] Only a few years afterwards, however, it underwent a drastic reduction. One reason for this was of course the loss of wealth in the form of ‘war damages’. A further reason was the devaluation of financial wealth in the form of government bonds: government bonds were already held in the eighteenth and nineteenth centuries, but in the course of war financing from 1914 on, their importance increased. After the First World War, these assets were devalued by inflation. In order to minimize the effects of inflation upon the general public and curb the price spiral, rent controls were also introduced, which reduced the returns on real estate. And finally, in their financial need, governments decided upon higher taxes upon inheritance and top incomes, which further eroded wealth – at least in France, Germany, Britain and the US.

This taxation was something new. Before the war ‘tax rates, even on the most astronomical incomes, remained extremely low … This was true everywhere, without exception.’