On the other hand, it is not correct that economic-private goods are consumed in proportion to income, because, while the smaller incomes must be fully employed in consumption, the greater ones grant a saving margin, the greater the greater the income, and therefore if the economic-public goods were consumed in the same proportion as the economic-private ones, the tax should be not proportional to income, but digressive. Before you start calculating in the tax calculator you should be aware of the theoretical aspects of the taxation parts.

The Theories in Tax

The theory of equality, or rather, of the proportionality of sacrifices, expounded for the first time by J. Stuart Mill, argues that the services of the state are necessary for all citizens, that necessity does not entail graduations and that consequently all taxpayers must suffer the same sacrifice for the satisfaction of the collective needs of general order.

It follows that the tax which takes an identical utility, that is, an equal subjective value, from every income is just. The defect of this theory is that it is not very precise and does not offer a concrete criterion for the distribution of taxes. How is it possible that a tax, even a highly progressive one, makes the rich classes and the poor classes suffer the same sacrifice? To the wealthy classes, for whom the subjective appreciation of each unit of wealth is minimal due to their wealth, and to the poor classes for whom, on the contrary, it is maximum, because of their poverty itself?

Is it A realistic One?

The theory of the equality of sacrifices was later perfected and transformed into that of proportionality of the sacrifices, which argues that the various classes of earners must sacrifice the same proportion not of their income, but of the total utility of their income.

  • This theory starts from the obvious premise that the utility of each unit of income is not the same for those who have many and for those who have few, because the needs that are satisfied with the first units of income are of first order, are necessary and essential; those, on the other hand, that are satisfied with the last units of higher incomes are of very low importance. The rich classes therefore attach less importance to each unit of their income than the poor classes attribute to each unit of their income. But this theory still lacks a precise basis, because the “measure of utility “has not yet been found.


The Theory of Payable Capacity was built by several authors, especially Germans (FJ Neumann, Al. Schaffle, A. Wagner), to avoid the criticisms addressed to the previous ones; and it is certainly preferable to them, so much so that in recent years it has been the dominant theory.