Economics Dictionary of ArgumentsHome
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| Income distribution: Income distribution in economics refers to how total income is shared among individuals or households within an economy. It examines the gap between different income groups, such as the rich and poor. Factors influencing income distribution include education, occupation, capital ownership, and government policies, which impact economic inequality and social welfare. See also Income, Distribution, Wages, Trade unions, Social policy._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Income Distribution - Dictionary of Arguments
Rothbard III 920 Income Distribution/Rothbard: {Some authors believe that a neutral taxation has no influence on the income distribution.] This assumes, ot course, no disincentive effects ot the tax on the various individuals or, rather, equiproportional disincentive effects on each individual in the society - a most unlikely occurrence. Problem: (…) the trouble is that this "solution" misconceives the nature of what a neutral tax would have to be. For a tax truly neutral to the free market would not be one that left income patterns the same as before; it would be a tax which would affect the income pattern, and all other aspects of the economy, in the same way as ifthe tax were really a free-market price. Prices: (…) we must surely realize that when a service is sold at a certain price on the free market, this sale emphatically does not leave income "distribution" the same as before. For, normally, market prices are not proportional to each man's income or wealth, but are uniform in the sense of equal to everyone, regardless of his income or wealth or even his eagerness for the product. A Ioaf of bread does not cost a multimillionaire a thousand times as much as it costs the average man. Market/production/economy: If, indeed, the market really behaved in this way, there would soon be no market, for there would be no advantage whatever in earning money. The more money one earned, the more, pari passu, the price of every good would be raised to him. Therefore, the entire civilized money economy and the system of production and division of labor based upon it would break down. Taxation neutrality: Far from being "neutral" to the free market, then, a proportional income tax follows a principle which, if consistently applied, would eradicate the market economy and the entire monetary economy itself. Poll tax/Head tax: It is clear, then, that equal taxation of everyone - the so-called "head tax" or "poll tax" - would be a far closer approach to the goal of neutrality. But even here, there are serious flaws in its neutrality, entirely apart from the ineluctable taxpayer-tax-consumer dichotomy. For one thing, goods and services on the free market are purchased only by those freely willing to obtain them at the market price. Since a tax is a compulsory levy rather than a free purchase, it can never be assumed that each and every member of society would, in a free market, pay this equal sum to the government. In fact, the very compulsory nature of taxation implies that far less revenue would be paid in to the government were it conducted in a voluntary manner. Rather than being neutral, therefore, the equal tax would distort market results by imposing undue levies on at least three groups of citizens: the poor, the uninterested, and the hostile, i.e., those who, for one reason or another, would not have voluntarily paid these equal sums to the government. >Cost Principle/Rothbard, >Benefit principle/Rothbard._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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