The single tax proposition, as above outlined, has many earnest advocates; but it has made very little progress as a practical policy in this country. The objection commonly raised against the proposal is that it would be an outright confiscation of a certain form of private property, namely, vacant land; that the single tax on the site value of improved land, like taxes on buildings used for industrial or mercantile purposes, would merely be shifted to the tenant and by him transferred in the form of higher prices to the consumer; and that the amount derived from the single tax would not yield enough to relieve the people from paying other forms of taxation.
The proposed sales tax.
More recently a good deal of discussion has taken place concerning the desirability of a general tax on sales at a uniform rate. It is argued that such a tax would fall directly and proportionately on all the people; that it would be so small as to have only the slightest effect upon prices; that it would be easy to collect and hard to evade. Such a sales tax at one per cent would probably yield nearly a billion dollars per year to the national treasury. On the other hand the objection is made that a tax of this sort would be a real hardship upon masses of the people who have small incomes and would be felt much less severely by the well-to-do.[[225]]
How money is appropriated.
The Spending of Public Money.—When taxes are collected they go into the public treasury of the nation, state, or community. Once in the treasury the money cannot be spent until it has been finally appropriated by Congress, by the state legislature, by the county board, by the city council, or by whatever body possesses the power to make appropriations. Appropriations are usually made once a year in the form of a budget, and the manner of making a budget is as follows: On or before a given date the various administrative departments (such as the parks department in cities or the departments of highways in states) make their estimates of expenditure for the next twelve months. Along with this, for purposes of comparison, a statement of probable revenue from taxes and other sources is prepared by the financial officers of the state or local government.
The estimates.
The estimates are put together and submitted to the mayor, the governor, or some other designated officer, who transmits them to the council or legislature as the case may be. The lawmaking body then considers the estimates, item by item, and finally votes the entire list after making such changes as it finds desirable. This budget, in cities and states, usually requires the approval of the mayor or the governor and may be vetoed like other measures. In some states the governor may veto individual items in the budget while letting the others stand, but as a rule he is required to accept or reject the appropriation bill as a whole. The general tendency is to give the executive branch of the state and local governments larger powers in budget-making so that the responsibility for any extravagance may be better centralized.
The older method of making appropriations, in Congress.
The National Budget System.—Until 1921 the national government made its large annual expenditures without any regular budget system at all. Each department (war, navy, agriculture, and so on) prepared its estimates and sent them to the Secretary of the Treasury, who presented them to the President for transmission to Congress with whatever recommendations he might choose to make. In addition to this every senator and representative had the right to propose appropriations, and hundreds of such proposals were made in Congress at every session. The practice, prior to 1921, was to refer all the departmental estimates and all the individual proposals to various committees. All estimates and bills for army expenditures went to the Committee on Military Affairs; all such measures relating to the postal service went to the Committee on Post-Offices, and so on. Eight or nine committees each took a hand in considering these proposals to spend money; each did its work without reference to what the other committees were doing; and each made its own recommendations to Congress.[[226]]
Results of this method.