Sec. 8. #Revenues from taxation.# Much the largest part of the receipts of most governments, apart from loans, and in many cases nearly all such revenue receipts, come from taxation.  Tax (as a verb) meant originally to touch or handle, then to estimate or appraise, and then to charge a burden upon some one, especially to impose a payment of services, goods, or money upon persons or property for the support of government.[4] Taxation is the legal process of taking income, services, or wealth from private persons for public uses.

Taxes are of various kinds, but they always are incomes, or wealth representing future incomes, transferred from private ownership of the taxpayers to the government.  In rare cases, more than the net current income of a certain kind may be taken for public uses.  As economic income has many sources, it may be intercepted at many different points, and taxation may take various forms.  The differences are so manifold that it is difficult to classify particular taxes satisfactorily.

Sec. 9. #Forms of taxation.# The following are the forms of taxation most frequently referred to.

(a) The simplest form of tax is a poll tax, a uniform amount payable by every person of the taxable class.  This form of tax is being less and less used in America and now amounts to little more than $17,000,000,[5] this being only .6 of 1 per cent of the aggregate taxes in the United States.  The national government gets about one-fourth of this amount from a tax on immigrants and the rest is collected by (some of) the states, counties, and minor divisions.  Usually, if not always, the poll tax is imposed only upon voters, as a condition to the right to vote.

(b) Taxes may be laid upon incomes, as they come into the possession of the owner.  Usually, only monetary incomes that arise in commercial transactions are taxable, and no attempt is made to estimate the value of psychic incomes.  Commercial incomes are more easily measured, but the omission of the other elements must cause many inequalities in the burden of the tax as between two individuals controlling equal incomes of real things.

(c) Taxes may be on property, either general upon all property in the taxing district, or special, upon certain forms of property.  A property tax may be specific or ad valorem, in proportion to value, as to the method of its determination.  Since the value of material wealth is the capitalization of the rentals at the prevailing rate of interest, a general, ad valorem, property tax, so far as it applies to material wealth, and if it were accurately assessed, would take an approximately equal proportion of wealth-incomes.  It does not, of course, touch directly incomes derived from wages and salaries, but it reduces their purchasing power in many cases.  It is in some respects more searching than a tax on actual rents, for it reaches the prospective, or speculative, rental.