Interest in fiscal problems has grown rapidly. Twenty-five years ago the subject matter of Public Finance aroused comparatively little discussion. While public expenditures were continually on the increase, wealth and population were increasing more rapidly, so that no greater per capita burden was felt by the citizen. To-day the situation is different. The demands upon the public purse have become so large, because of extended and increased governmental activities, that the burden of taxes has begun to be felt, and in many cases it has begun to cut deeply. A few decades ago, therefore, the principles of Public Finance primarily commanded the interest of public officials, while at present the citizen upon whom the tax burdens fall is also interested. He is beginning to ask what is being done with the funds he has paid in taxes, whether he is paying more than his share, whether the funds are properly handled, and what can be done to secure a better fiscal system.

The nature and rapid increase of public expenditures, as well as the objects for which they are made, have become of general interest. The public has learned to place so much reliance upon the activities of the government that it is continually demanding that new activities be undertaken and that old ones be carried out more efficiently. The per capita expenditures of the cities for education, and the expenditures of the states for education and the care of defectives, delinquents, and dependents, have reached an amount that would have been considered enormous a few years ago. The nature of the expenditures of the different political units, the extension of governmental activities, accompanied by increased tax burdens, have caused the individual to weigh more carefully the resulting utilities. The greatest item of expenditure, and the one which has made tax burdens most pressing, has been for war or the preparation for war. The Great War has caused the indebtedness of the principal nations to reach figures which are incomprehensible, the burden of which will last for years. Consequently, the nature and growth of public expenditures, the forms and costs of public indebtedness, the possible methods of financing an emergency, such as a war, as well as the direct and indirect costs of war, are no longer of interest to fiscal officials alone, but are commanding the attention of the general public, upon which the burden finally rests.

The rapid increase in public expenditures has made it necessary to seek new fields for revenue, and the taxpayer has come to demand a justification for the new taxes he is called upon to pay. The Federal government still relies extensively upon customs' duties and excise taxes, and these, of course, deserve consideration; but in recent years it has begun to use corporation taxes, income taxes, excess profits taxes, and inheritance taxes. The states have ceased to secure their entire amount of revenue from property taxes, but are using corporation taxes, business and license taxes, income taxes, and inheritance taxes as well. The localities are supplementing property taxes with numerous license payments. These are taxes the burden of which the citizen is required to bear, and he not only has the right to know something of their merits and difficulties, but it is his duty to be informed. To accomplish this a somewhat extended discussion of each of these forms of revenue becomes necessary.

The pressure of the tax burden has caused much concern about justice, the pointing out of many problems, followed by many suggestions for reform. The proper method of levying a tax, together with its shifting and incidence, can be properly understood only when the discussion is based upon sound economic principles. Loose thinking, which has otherwise resulted, has been responsible for the proposal of reforms which cannot stand under the light of reason. Some of these, such as the single tax, have been propagated to such an extent as to need special emphasis, while others can be dismissed much more easily.

It is to help the student, the general reader, and the public official to secure a better understanding of the nature of public expenditures and revenues, and the principles which underlie a sound fiscal system, that the following chapters have been written. They are in no sense an exhaustive treatment, but, as the title of the book indicates, an outline, which could easily be expanded. An attempt has been made to eliminate tedious theoretical and philosophical discussions, which cannot easily be understood, as well as to limit the amount of historical material. Some theory will, of course, be found in the necessary underlying economic principles, and historical backgrounds and illustrations will frequently be used. Primarily, however, the purpose is to emphasize the practical aspects of the field of Public Finance, and to acquaint the taxpaying citizen with the important aspects of expenditures and revenues with which he is continually coming in contact.

In a book of this nature it is impossible to acknowledge all the sources to which one is indebted. Much of the material has been collected from general reading for my courses in Public Finance and Taxation, and acknowledgment must be made to all the important writers in this field. I cannot refrain from mentioning Profs. A. A. Young and T. S. Adams, under whose instruction my interest in fiscal problems began to develop. Many of my friends and colleagues at the University of Illinois have rendered valuable assistance. Dean Charles M. Thompson has devoted much time to reading the manuscript and has given many valuable suggestions, as has also my colleague, Prof. N. A. Weston. Mr. E. E. Leisy, of the department of English, carefully read the entire manuscript for corrections in composition. Others have assisted in reading proof and in numerous other ways, an indebtedness to whom I hereby acknowledge.

M. H. Hunter.

Urbana, Illinois, July 1, 1921.