CHAPTER VII 
THE EQUITY OF LOCAL RATES 
Ir is clear that two great principles or canons of 
taxation swayed the minds both of the people who 
respected custom in the assessment of the old rates 
and of the politicians and parliamentary drafismen 
who created new statutory rates. These principles or 
Canons are :— 
(i.) That every inhabitant of a district should be 
made to contribute according to his ability ; and 
(ii.) That everyone who receives benefit from the 
local expenditure should be made to contribute in 
proportion to the benefit he receives. 
Applied to the same rate, the two principles are 
obviously incompatible. It is difficult to think of any 
kind of government expenditure which confers benefits 
upon people approximately in proportion to their 
ability to contribute. But it happens that in practice 
the nearest possible approximation to local rating 
according to ability and the nearest possible approxi- 
mation to local rating according to benefit are one 
and the same thing, namely, the rating of persons in 
respect of fixed property in the district. 
Are we to accept this system ? 
The ultimate object of every system of public 
finance, so far as the distribution of taxation, or 
rather the distribution of all kinds of payments 
drawn Ly the State from its subjects, is concerned, 
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