Many writers have attempted to ascertain what proportion of the national income should be spent by the state. Some have attempted a percentage relationship, and suggestions have ranged from 5 to 25 per cent. Others have suggested a per capita basis, and still others claim that expenditure should be gauged by area. The nature of the factors, however, which should control the amount of expenditures, largely vitiates any relations such as these.

The nature of the expenditure will have much force in the determination of the proper percentage of total income to be spent by the state. If a state be engaged in a defensive war, for example, it would be proper to go to any length in its expenditures. A larger percentage would be justified on some commercial enterprise which would bring a future return than on one which would not. The size of the income is itself an item of importance. A 15 per cent expenditure for a country with a large income might be much less burdensome than a 10 per cent expenditure for a country with a small income. Per capita and area bases are still more unsatisfactory. A per capita comparison of income and expenditure of the state of Illinois and some of the provinces of China would show the uselessness of such a basis. Area fails in much the same way, as it shows neither amount of income nor the need for state activity. Any attempt to measure what the state should spend must consider not only the amount of income, but also the nature of the need for the expenditure and the hardship it will entail.

Additional Reading

Census reports:

Financial Statistics of Cities.

Financial Statistics of States.

Wealth, Debt, and Taxation. Statistical Abstract of the United States.