Economics Dictionary of ArgumentsHome
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| Excess profits tax: An excess profits tax in economics is a tax levied on profits that exceed a normal or expected level of earnings, typically during periods of economic boom or war. It aims to prevent excessive profiteering by imposing higher taxes on unusually high profits, ensuring a more equitable distribution of wealth and addressing inflationary pressures. See also Taxation, Inflation, Profit._____________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 Excess Profits Tax - Dictionary of Arguments
Rothbard III 926 Excess Profits Tax/EPT/Rothbard: Of all the possible types of taxes, the one most calculated to cripple and destroy the workings of the market is the excess profits tax. Market economy: For of all productive incomes, profits are a relatively small sum with enormous significance and impact; they are the motor, the driving force, of the entire market economy. Incentives: Profit-and-loss signals are the prompters of the entrepreneurs and capitalists who direct and ever redirect the productive resources of society in the best possible ways and combinations to satisfy the changing desires of consumers under changing conditions. Calculation: With the drive for profit crippled, profit and loss no longer serve as an effective incentive, or, therefore, as the means for economic calculation in the market economy. War/profits: It is curious that in wartime, precisely when it would seem most urgent to preserve an effcient productive system, the cry invariably goes up for "taking the profits out of war." This zeal never seems to apply so harshly to the clearly war-borne "profits" of steel workers in higher wages - only to the profits of entrepreneurs. There is certainly no better way of crippling a war effort. Excess/measurements: In addition, the "excess" concept requires some sort of norm above which the profit can be taxed. This norm may either be a certain rate of profit, which involves the numerous diffculties of measuring profit and capital investment in every firm; or it may refer to profits at a base period before the war started. War profits/war production: The latter, the general favorite because it specifically taps war profits, makes the economy even more chaotic. For it means that while the government strains for more war production, the excess profits tax creates every incentive toward Iower and ineffcient war production. VsExcess profits tax: In short, the EP T tends to freeze the process of production as of the peacetime base period. And the longer the war lasts, the more obsolete, the more ineffcient and absurd, the base-period structure becomes. >Taxation/Rothbard, >Income tax/Rothbard, >Cost Principle/Rothbard, >Neutral taxation/Economic theories, >Neutral taxation/Rothbard, >Service/Rothbard, >Bureaucracy/Rothbard, >Benefit principle/Rothbard, >Progressive tax/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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