ABSTRACT
Certain rules about taxation have been laid down by writers on the subject. That the form of taxation should be simple enough for the ordinary taxpayer to under stand, that taxes, the cost of collection of which is low are preferable, and so on. Certain general principles have also been laid down. It has been said that every citizen should contribute something towards the expenses of the State in order to give to him a sense of responsibility. The justification or otherwise of this principle belongs to political rather than to economic science. It has also been laid down that the taxpayers should pay in proportion to their ability to do so. The question then arises as to how this principle is to be interpreted. It used to be held that proportionate taxation achieved this end (e.g., an income tax of 5 per cent, on all incomes). But the conception of marginal utility destroyed this simple idea. It is now seen that to take £5 from an income of £100 involves a much heavier sacrifice on the part of the taxed person than does the taking of £50 from an income of £1,000. Some system of progressive taxation is seen
ECONOMICS FOR BEGINNERS
to be necessary if something approaching equal sacrifice i« to be achieved, that is, the rate of taxation should vary with the wealth of the taxpayer. There is, however, great practical difficulty in drawing up such a scale. It may be added that since individual circumstances vary very greatly, no system of taxation, however cleverly drawn up and however fair as between classes, can avoid inflicting hardship upon individuals.
