ABSTRACT
The position on financial policy that Professor Davidson expounds so skilfully in his essay in the final issue of this journal last year, has the great practical advantage over my own standpoint that it is directly linked with current law. For the most part, his proposals are merely intended to remedy obvious lacunae or inconsistencies in the legislation. To be sure, the theoretical principle he applies throughout, the principle of ability to pay, is, as he himself admits, rather vague and indeterminate (in my opinion it has the far graver disadvantage of failing to solve the problem, except in certain specific cases), but he avoids these difficulties, at least in this essay, by completely brushing aside the issue of the gradation of the taxation in cases of differing ability to pay — and of course by ignoring even more completely the question of the actual level of the taxes. For the time being he merely demands that those who have the same ability to pay, which of course in general means the same economic position, ought also to be taxed alike. This demand is so self-evident that it comes into play in about the same way no matter which theoretical conception one proceeds from. After all, from the point of view of the benefit principle, too, it is true that by and large, and ignoring special circumstances, people who are in the same financial position also have an equal interest in the various branches of the state's activity and ought therefore to contribute equally to their maintenance. The changes in our income taxation for which Davidson thus argues, with no theoretical support other than easily comprehensible analogies and generally accepted principles of fairness, are in my opinion, too, almost exclusively improvements, and I can only wish him success for them when the income tax law is revised.
