78 UNIVERSITY OF COLORADO STUDIES 
failure in the United States. This is meant to apply to the part of the 
income that is determined by the statements made by the taxpayer in 
his declaration. The tax on rentals is therefore in harmony with the 
feeling of resentment against any inquisition into one’s financial ability 
and would accordingly eliminate much of the friction now characteristic 
of the fiscal system. 
It has been assumed that as a general principle taxes on consumption 
are bad and this is perhaps true enough to make it a rule that such 
taxes should not be levied oftener than necessary. Other sources of 
revenue should be found whenever possible. However, consumption 
when thought of in this connection is assumed to mean consumption 
necessary to guarantee the welfare of the community. This was the kind 
of consumption in vogue when the earlier works on taxation were written 
and when therefore the principle above mentioned gained general 
acceptance. With the great increase of wealth in the past half-century, 
however, and the keener competition among social classes, it seems that 
consumption has become a thing which it is not safe to use in judging 
the necessities of the people. It does not indicate expenditure for social 
welfare but tends rather in many instances to show a desire to consume 
conspicuously and wastefully. Large classes in the community main- 
tain great establishments not for the sake of necessity but primarily 
for the sake of the social standing the maintenance of these households 
gives them. The sense of fitness conforms in considerable degree to 
the principle of conspicuous waste. In so far as this is true, the criticism 
of the habitation tax as a tax on consumption loses much of its force. 
It is, perhaps, going too far to accept Wagner’s theory that taxation 
is a certain socio-political instrument to be used for the conscious 
improvement of society.‘ Yet it would seem that if the government 
is justified in levying some regulative taxes, such as those on certain 
‘vices, for the sake of control and repression, it is not doing violence 
to the imagination to think that wasteful consumption for the sake of 
display might possibly be considered as somewhat akin and properly 
subject to taxation. The tax on expensive habitations might have 
certain sociological results. In so far as its imposition would tend to 
t WacneER, Finanzwissenschaft, Vol. I, § 27. 
