ABSTRACT
Yet, by a certain one-sidedness of economic reasoning in discussions of the subject— save for rare exceptions— only one of these aspects that connected with collection of the tax proceeds, has received consideration in the theory of incidence. The effects produced by expenditure of the tax proceeds on the industry originally concerned, are small; and the classical type of analysis might be deemed to give a sufficiently accurate account of the effects produced in this industry. The temptation to disregard effects produced by the expenditure of the tax proceeds will be greatest when this expenditure is spread thinly over a wide field. If it had been permissible in this case to disregard the expenditure of the tax proceeds, then, no less so, it would have been permissible to disregard the collection of the tax and the effects it produces from the side of costs—the economic effects in both cases being equally widely diffused.
