aised by taxation of possessors and producers of
wealth, in anticipation of current public needs.

If for any reason government expenditures exceed its revenues, the
government, like any individual, becomes a borrower. It may borrow by
contract to pay at some future time for construction of buildings or
machinery, or by issue of scrip in the shape of promises to pay at some
definite or indefinite time in the future, or more distinctly still by
sale of bonds, which are definite certificates of indebtedness, negotiated
like the notes of individuals in great banking centers. Yet all of these
are only methods of postponing the taxation which must support the
government in its necessary machinery. Government can live upon credit in
the same way, and only in the same way, that individuals can. The economic
reasons for such credit must be the same as in individual experience.

_Principles of taxation._--Since taxation in general is simply a way of
distributing expenses to those for whose benefit expenditure has been
made, the first question is one of fairness in distribution. The benefits
from government expenditure ought to be universal, but are not necessarily
equal. Like all the good things of nature, the benefits of the government
are not appreciated by all alike. No one would probably suggest the
possibility of distributing the expenditure exactly in accord with
advantage received. Wherever the service is distinctly personal, as in the
regular mail service, an attempt is made to charge each person the average
cost of the service. Even the large miscellaneous mail distribution at
less than cost may be fairly borne by those who use the mail for personal
advantage, since this is likely to be in proportion to the intelligent
activity shown in correspondence. Some few taxes upon special commodities
of questionable advantage to the multitude, like liquors and tobacco, are
supposed to be paid by those who gain the only advantage received by
anybody in protecting their use.

Some more general principle, however, must be found for adjusting the
burden of general expenses so that each individual will bear his share. If
the burden belongs to all, it should rest fairly upon all. Hence equality
is usually given as the first principle of taxation. But it is evident
that in this case equality means equity, not a mathematical division by
the number of taxpayers. The interpretation is therefore "according to
ability." According to Profes