Revenue systems have gone through a long process of development, and it is only in recent years that they have assumed their present form. The early state scarcely functioned so as to commend itself for support by its citizens. Revenues had to be secured from independent sources, such as public lands. These soon became inadequate, and the public consciousness had not been sufficiently aroused to permit the direct exaction of funds from the citizens. Roundabout methods had to be used, such as claiming a payment for a more or less fictitious service, or by the use of taxes, the burden of which was hidden by their indirectness. It has only been with the development of a high sense of individual responsibility in public affairs that the state has made compulsory levies upon individuals and property without creating a disastrous antagonism.

Historical Development. - Various writers have traced the historical development of the idea of compulsion. The available sources of funds often proved insufficient and the citizenship had to be relied upon to meet the need. That it was looked upon as a gift to the state is evidenced by the terms donum and benevolence, the designations by which the first payments by citizens were known. That the state had to implore help at times is shown by the fact that revenues sometimes were called prcecarium and bede. The idea that the state had a right to expect assistance from its citizenship, or that the citizens should be under obligation to sacrifice anything for the welfare of the state, did not develop until later. That these ideas did develop, however, is shown by such revenues as the aid, steuer, and duty. The more modern stage was reached when the right of the state to assess, levy, and collect funds from its citizenship became recognized. The use of such expressions as impost and tax marks the beginning of this modern situation, in which the citizen is so interested in the welfare and activities of the state that he will consent to pay the levies that are placed upon him.

English Poor Rates. - An interesting example of this development is found in the poor rates of England. It became necessary, very early, that the state give assistance to the poor, and funds had to be secured. At first voluntary contributions were made. It was not long until the amount secured by this means was insufficient, and the authorities were instructed to prosecute those who had not contributed. This did not succeed in getting what was considered a just amount from the various contributors, and power was conferred upon the justices of the peace to determine what would be considered a reasonable contribution, and if it were not made, prosecution was likely to follow. The next change was to that of regular levies, with a compulsory payment of the amount. This policy has continued to be used to the present.

Motives Beneath Modern Revenues. - Many of the motives suggested in this sketch of the development of revenues, no doubt, are still active. Gifts still form a part of the revenue of most governmental units, either as a conscience fund or for the building or endowing of some public institution. The feeling of obligation, moreover, often prompts payments for particular purposes. The state may still receive returns from the conduct of industry, the products of which are purchased by the citizens of their own volition. Yet the sum total of these would form a small share of the income of the modern state, for the greater part of the amount received would doubtless remain with the individual if he were not compelled to turn it over to the public treasury. Even the modern sense of public duty has not been developed to such an extent that all state activities would be supported by voluntary contributions. It will be the various classes of these compulsory exactions with which the succeeding chapters will deal most extensively.

Additional Reading

Bullock, Readings in Public Finance, chaps. iv, v, vi.