There has been some discussion as to whether the study of Public Finance properly belongs in the field of Economics. Some writers treat fiscal problems in their works on general economics, while others treat the problems under the caption, "Economics and Public Finance." Still other writers on general economics give no discussion of public expenditures and revenues. The great amount of attention which has been devoted to a discussion of private consumption, production, and distribution has emphasized the importance of these phenomena, yet the fact remains that public revenues and expenditures are of sufficient economic consequence to command the attention of students of economics.

The principles which underlie the study of Public Finance are clearly the same as those which underlie the study of the other fields of economics. Economics deals with laws which govern the activities of individuals in the expenditure of energy to supply their wants. Public Finance is also a study of the exertion of individual effort to supply wants. Governments secure, through taxes or otherwise, some of the returns from individual effort as a prerequisite to supplying materials and services. The individual is concerned with comparing the utility furnished by the government with the utility he could have secured had the government made no demands upon him. No individual income can remain unaffected when a part of it is taken in the form of a tax.

Public funds are frequently used, either to aid private production or directly to carry on productive enterprises. Those who are interested in efficient production must be concerned about such uses of public funds, and those who have the direction of public funds for productive enterprises should know the economic principles upon which efficient production rests. The successful management of a government industry must be based upon just as sound economic principles as is a successful industry conducted by individuals. When the effect of securing revenues in different ways is considered from the standpoint of justice, some definite theory of distribution must be in mind. The suggestion to adopt a rigorous single tax, which would take the economic rent of land in taxes, immediately arouses the interest of those who are concerned with rents and land values. Any income, whether it is paid from a public purse or from a private purse, is of economic concern. Fiscal officials are concerned with the relationship of cause and effect in the collection and use of public revenues; here the thought is guided by the same economic laws that govern in the problem of the distribution of wealth. The underlying principles of Public Finance, then, are the same as those upon which all sound economic reasoning is based.