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Public Finance [1892] The Online Library of Liberty A Project Of Liberty Fund, Inc. Charles F. Bastable, Public Finance [1892] The Online Library Of Liberty This E-Book (PDF format) is published by Liberty Fund, Inc., a private, non-profit, educational foundation established in 1960 to encourage study of the ideal of a society of free and responsible individuals. 2010 was the 50th anniversary year of the founding of Liberty Fund. It is part of the Online Library of Liberty web site http://oll.libertyfund.org, which was established in 2004 in order to further the educational goals of Liberty Fund, Inc. To find out more about the author or title, to use the site's powerful search engine, to see other titles in other formats (HTML, facsimile PDF), or to make use of the hundreds of essays, educational aids, and study guides, please visit the OLL web site. This title is also part of the Portable Library of Liberty DVD which contains over 1,000 books and quotes about liberty and power, and is available free of charge upon request. The cuneiform inscription that appears in the logo and serves as a design element in all Liberty Fund books and web sites is the earliest-known written appearance of the word “freedom” (amagi), or “liberty.” It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash, in present day Iraq. To find out more about Liberty Fund, Inc., or the Online Library of Liberty Project, please contact the Director at [email protected]. LIBERTY FUND, INC. 8335 Allison Pointe Trail, Suite 300 Indianapolis, Indiana 46250-1684 Online Library of Liberty: Public Finance Edition Used: Public Finance. Third Edition, Revised and Enlarged (London: Macmillan, 1903). Author: Charles F. Bastable About This Title: One of the first textbooks ever written on the subject, and still eminently readable, with clear organization, definitions and explanations. The taxation of income, capital, imports, consumption goods, etc., and the effects on wages, rents, profits, production, and consumption are major topics, along with the government’s budget constraints. Another copy of this book can be found in HTML format at our sister website Econlib. PLL v6.0 (generated September, 2011) 2 http://oll.libertyfund.org/title/275 Online Library of Liberty: Public Finance About Liberty Fund: Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals. Copyright Information: The text is in the public domain. Fair Use Statement: This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit. PLL v6.0 (generated September, 2011) 3 http://oll.libertyfund.org/title/275 Online Library of Liberty: Public Finance Table Of Contents Preface to the Third Edition From Preface to the Second Edition From Preface to the First Edition General Introduction Chapter I Chapter Ii Book I: Public Expenditure Chapter I: State Economy. General Considerations Chapter II: The Cost of Defence Chapter III: Justice and Security Chapter IV: Administrative Supervision. Poor-relief Chapter V: Education. Religion Chapter VI: Expenditure On Industry and Commerce. Constitutional and Diplomatic Expenditure Chapter VII: Central and Local Expenditure Chapter VIII: Some General Questions of Expenditure Appendix.: On the Classification and Guiding Maxims of Public Expenditure. Book II: Public Revenue the Economic Or Quasi-private Receipts Chapter I: The Forms and Classification of Public Revenue Chapter II: The State Domain. Lands and Forests Chapter III: The Industrial Domain Chapter IV: The State As Capitalist. Administrative Revenue Chapter V: State Property.—general Considerations On Quasi-private Revenue Book III: Public Revenue (continued) the Principles of Taxation Chapter I: Definition and Classification of Taxation Chapter II: The General Features of Taxation Chapter III: The Distribution of Taxation Chapter IV: The Tax System: Its Forms Chapter V: The Shifting and Incidence of Taxation1 Chapter VI: The Principles of Local Taxation Chapter VII: The Canons of Taxation Book IV: Public Revenue—concluded - the Several Kinds of Taxes Chapter I: Taxes On Land Chapter II: Taxes On Capital and Business Chapter III: Personal and Wages Taxes Chapter IV: Taxes On Property and Income Chapter V: Taxes On Consumption: Their Classification: Direct Consumption Taxes Chapter VI: Internal Taxes On Commodities Chapter VII: Customs Duties Chapter VIII: Taxes On Communications and Acts Chapter IX: Taxes On Successions1 Book V: The Relation of Expenditure and Receipts Chapter I: Introductory—state Treasures PLL v6.0 (generated September, 2011) 4 http://oll.libertyfund.org/title/275 Online Library of Liberty: Public Finance Chapter II: Public Indebtedness, Its Modern Development Chapter III: The History of the English Debt Chapter IV: History of the French Debt, Indebtedness In Other Countries Chapter V: The Theory of Public Credit and Public Debts Chapter VI: The Forms of Public Debts Chapter VII: The Redemption and Conversion of Debt Chapter VIII: Local Indebtedness Book VI: Financial Administration and Control Chapter I: Introductory—historical Development Chapter II: The Budget—its Preparation—the Collection of Revenue Chapter III: The Vote of the Budget—control and Audit Chapter IV: Administration and Control In Local Finance MACMILLAN AND CO., limited london • bombay • calcutta • madras melbourne THE MACMILLAN COMPANY NEW YORK • BOSTON • CHICAGO • DALLAS • ATLANTA • SAN FRANCISCO THE MACMILLAN COMPANY OF CANADA, LIMITED TORONTO toronto PLL v6.0 (generated September, 2011) 5 http://oll.libertyfund.org/title/275 Online Library of Liberty: Public Finance [Back to Table of Contents] PREFACE TO THE THIRD EDITION In preparing this edition (which has been seriously delayed owing to pressure of other work) it has been my aim, while preserving the general character of the book, to give due place to the various recent contributions to financial theory and to the latest developments of fiscal policy in the leading countries of the world. Thus, the discussions on the classification of public expenditure, the theory of minimum sacrifice as the principle for distribution of the public burdens, the controversies as to the division of taxation between countries with a common revenue system, as well as those on the rue principles of local taxation, have been noticed. So have the latest theories on the ever-recurring question of incidence. But though we must gladly recognise the increased interest that the revival of economic inquiry has attracted to the more abstract side of financial theory, it is yet essential to remember that the new matter is small in proportion to the body of pre-existing doctrine. There has been no fundamental change, but only that expansion which is characteristic of all scientific study. Hence the space allotted to the topics mentioned above has been rigidly restricted and their relation to the general system made as obvious as possible. The movements of financial policy have been similarly treated. The new French inheritance taxes, the reform of direct taxation in Austria, the temporary duties in the United States for the purposes of the Spanish war, as well as the improvements which the same event has produced in Spanish finance, all these have found their natural place in the descriptive and historical notices of the several taxes. The most remarkable, and to English readers the most serious, of these practical developments has been the alteration in the direction of English financial policy brought about by the occasion of the South African war, but really due to a deeper cause, viz. the desire to secure what is described as a broader basis for taxation. Under the influence of this idea, urged by an influential section of public opinion and obtaining additional support from the protectionist party, the customs tariff has been first extended in the form of a revenue duty on sugar, accompanied by a return to the primitive policy of an export duty on coal, and followed by a trivial, but so far protective, tax on corn. These measures, when considered, as they should be, in connexion with the legislation on matters of economic policy of the past seven years, indicate a disposition on the part of the predominant political party to depart from the financial principles which have prevailed since 1860. This attempt, whatever be its fate, is one of great interest to the scientific student of finance. The success that has attended the financial measures of Peel and Gladstone, and the remarkable contrast between the position of Great Britain and that of other European states in respect to economic and financial conditions, suggest the belief that experiments such as the coal and corn duties are undesirable, while any great extension of the policy would be hazardous in the extreme. But whether the general basis of the established English revenue system be retained or abandoned, it is beyond doubt that the growth of expenditure presents a grave problem for the future. In spite of warnings from responsible members of both parties, PLL v6.0 (generated September, 2011) 6 http://oll.libertyfund.org/title/275 Online Library of Liberty: Public Finance there has been an automatic increase in outlay that necessarily involves a heavier tax burden. No readjustment of taxes can give an escape from this result. The income of the citizen may, indeed, be attached directly, or by a series of indirect charges. The adoption of the latter method will not, however, reduce the amount of pressure; in some respects it will decidedly aggravate it. Prudent selection of the forms of taxation may afford some relief, just as mistaken choice will add to the loss, but speaking broadly, Ricardo's emphatic statement holds good that “the great evil of taxation is to be found not so much in any selection of its objects as in the general amount of its effects taken collectively” (Works, p.
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