Page:Indian Journal of Economics Volume 2.djvu/274

262 H. ,?TANLEY JEVON$ years the expenditure which necessitates increased taxation, either to pay the interest and sinking fund on its cost, 'in the case of a public work, or for its initial recurring expenditure, as in the case o! educa- tion, is not counterbalanced by any increase of taxable capacity. Such increase only arises slowly through the growth of the indirect revenne of the public work, or from the increase of the general productive efficiency of the people, in the case of education. But the growth of taxable capacity due to such expenditure, although it begins slowly, continues to grow at an ever, increasing rate--by compound interest so to speak--for half a century or more. The increase of taxable capacity continues to grow by economic actions and reactions at a greater rate when a number of such measures have been taken and are coming to frnition at the same time. If it were possible to single out the increase of taxable capacity due ?o any one public work or educational with normal wisdom measure and conceived and executed success, it would almost certainly be fonnd that-such increase after forty or fifty years would be eqnal to a very high percentage on the initial capital cost--anything from fifty to one or two hnn- dred per cent per annum. A certain railway, or irriga- tion canal, may easily, after tltirty years, repay its cost every year in i?rcrease of taxable capacity. Of course but a small fraction of such increase of taxable capacity is usually taken by the tax system. The people are able to enjoy more sttperfiulties, which i?r their turn become co?rventional necessaries; an? they are also able to save and invest more, which again increases social income and so also still fitrther a?tgments the tax- able capacity. If we were to reckon the future return in ?xable capacity resulting frown expenditure on education, taking as initial expenditure, say, the total of recurring expenditure during a period of three year's--even