Page:Indian Journal of Economics Volume 2.djvu/272

26O H. STANLEY JEON$ tinue growing for many years, becoming am'ply remune- rative after time has elapsed for the necessary economic readjnstments to take place. (5) Expenditure which is with slow cnmulative effect; ture on education, on improved agricultural instruction. In this economically productive as, for example, expendi- land tennre, or on case the return is delayed. but it gradually becomes very great indeed. It remains finally to consider the effect of increased taxatioh expended in the ways ontlined above on the taxable capacity. It may be taken for granted that no democratically governed community is likely to tax itself to as much as one-half or even one-third of the taxable capacity, except for war, because it has not a snfficiently vivid appreciation of the social advan?ges of such expenditure as matures for the benefit of the future to sacrifice a geat part of its present enjoyment of snperfiuities for this object. Althongh with good finance, the real present sacrifice involed in anticipa- tion of benefits is very small, expenditure on public works, education, and so forth, does not appeal to the imagination until a reform campaign has made them a matter of politics. In most European countries before the war, the taxation was probably not more than one-fourth to one-third of the taxable capacity, .except perhaps in Italy. Consequently there was much opening for increased taxation, as the war has clearly proved, even.making allowance for the depreciation of money. We must take separately each of the five classes of public expenditure outlined above in order to estimate the effect of such expenditure on the taxable capacity. Expenditure of the first class, having a directly pleasing effect, will do little or nothing to increase the social income and consequently little or nothing to increase the taxable capacity; but it is probable that such expenditure will make people willing to tax them-