ABSTRACT
The effect of an entire public finance system on the distribution of disposable income and wealth cannot be known; the question itself is meaningless. The existing distribution of disposable real income, including free government services in real income, is known; the distribution that would obtain under an alternative public finance system may be estimated or conjectured. The change in the real disposable income of a household arising from a postulated change in the public finance system may be computed in the following manner. Most public finance systems can probably be altered in ways that will change appreciably the distribution of real disposable income while not disturbing appreciably the values already reached for other goals. The definition of aggregate income used in this concept is therefore a residence concept, not a source concept, and the rate of economic growth of a country is measured by the rate of increase in the per-person income of its residents from domestic or foreign sources.
