The difficulties encountered in attempting to use the benefit theory soon led to numerous other proposals. Some were simply modifications of this theory, while others sought justice in entirely different lines. The theory which came to be generally accepted as the one which would most nearly approximate justice is called the faculty or ability to pay theory - that is, every individual should pay to the support of the state according to his ability.
Adam Smith stated the theory in his first canon of taxation, yet connected it with the idea that benefits measured ability. Mill approached it from the idea of equality of sacrifice. Equality should be the rule in taxation, since it should be the rule in all affairs of government. The state made no distinction in the strength of individual claims upon it, consequently its requirements should fall with the same weight upon all. In this way the least sacrifice would be felt by the whole. His criterion of equality was that taxes should be so apportioned that in the contribution of each person no one would feel more or less inconvenience than any other person. He realized that this standard of perfection could not be completely realized, but that the first object should be to know what perfection is.1
In this discussion Mill embodies the real justification of ability to pay as the basis for justice in measuring taxes. It is in the nature of the state itself. It is an existing entity only because of the citizens which make it up. If these are destroyed the state no longer exists. It is an organization, then, of very much the same nature as other organizations made up of the membership of individuals, and whose perpetuation depends upon the interest of the members. If the membership of a church, lodge, or college fraternity is destroyed or becomes disinterested, the organization expires. The state is of much the same nature, and its continued existence is, or should be, of such vital interest to each member that its funds can justly be secured on the same basis as in a church, or other similar organization. Here the members are not expected to contribute in respect to the benefit received, which may be immeasurable, but in accordance with their ability. Likewise, in raising a building fund, a fraternity expects an alumni member who has the ability to contribute liberally, while a small amount or nothing is expected of a student member with little means. It is because of the nature of the relation of the citizen to the state that taxes should be levied in accordance with the ability to bear them.