In this review of the development of tax systems of different countries certain definite tendencies may be noticed. The most important, perhaps, is that, as the central governments become older, and the political duties and responsibilities become recognized by the citizens, direct taxes can be used to supply an increasing proportion of the needs. This is evidenced by the importance of the income tax in the fiscal systems of England and Prussia, and its recent adoption in the United States.

Another noticeable tendency is to place less reliance upon property as a base for taxes. The European countries have given it up in large measure, while in the American states other taxes are being used to supplement it, and in a few cases the revenue from property is left almost entirely for the use of localities. The tendency has developed, also, to formulate revenue systems, based upon ability to pay taxes. The gradual replacing or supplementing of indirect taxes by those, the burden of which can more easily be traced, and the seizing upon new forms of ability as they make their appearance, are evidences of this condition.

No generalization can be made as to tendencies toward centralized control of fiscal systems. In some European countries such control is practically absent, while in others it is important. In the United States, aside from constitutional limitations, the Federal government exercises no control over the states. The states, however, usually have complete control over the minor political divisions. There has been a recent movement in some parts of the country to secure local option in fiscal matters, but as yet it has met with little success. Another very marked tendency in every political division is the resort to the use of public credit. A subsequent chapter will be devoted to this aspect of revenues.

Additional Reading

Seligman, Essays in Taxation, chap. xvi.