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The author or concept searched is found in the following 1 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Income Tax | Economic Theories | Rothbard III 916 Income tax/Economic theories/Rothbard: (…) an income tax will shift the social proportion toward more consumption and less saving and investment. >Income tax/Rothbard, >Time preference/Rothbard. VsTime preference: It might be objected that the time-preference reason is invalid, since the government offcials and the people they subsidize will receive the tax revenues and find that their money stock has increased just as that of the taxpayers has declined. Saving/Investments/RothbardVsVs: (…) no truly productive savings and investments can be made by government, its employees, or the recipients of its subsidies. Saving/Investments/economic theories/VsIncome tax: Some economists maintain that income taxation reduces savings and investment in society in yet a third way. They assert that income taxation, by its very nature, imposes a "double" tax on savings-investment as against consumption.(1) The reasoning runs as follows: Saving and consumption are really not symmetrical. Saving: All saving is directed toward enjoying more consumption in the future; otherwise, there would be no point at all to saving. Saving is abstaining from possible present consumption in return for the expectation of increased consumption at some time in the future. No one wants capital goods for their own sake. They are only the embodiment of increased consumption in the future. (2) Rothbard: This line of reasoning correctly explains the investment-consumption process. RothbardVsFisher, Irving: [Fisher’s theory] suffers, however, from a grave defect: it is irrelevant to problems of taxation. It is true that saving is a fructifying agent. But the point is that everyone knows this; that is precisely why people save. Rothbard III 917 Time preference/saving/Rothbard: Yet, even though they know that saving is a fructifying agent, they do not save all their income. Why? Because of their time preferences for present consumption. >Time preference/Rothbard. Every individual, given his current income and value scales, allocates that income in the most desirable proportions between consumption, investment, and additions to his cash balance. >Cash balance/Rothbard. Any other allocation would satisfy his desires less well and Iower his position on his value scale. The fructifying power of saving is already taken into account when he makes his allocation. Double penalizing: There is therefore no reason to say that an income tax doubly penalizes saving-investment; it penalizes the individual's entire standard of living, encompassing present consumption, future consumption, and his cash balance. It does not per se penalize saving any more than the other avenues of income allocation. >Neutral taxation/Rothbard, >Neutral taxation/Economic theories, >Cost principle/Rothbard, >Benefit principle/Rothbard. 1. Thus, cf. Irving and Herbert W. Fisher, Constructive Income Taxation (New York: Harper & Bros., 1942). "Double" is used in the sense of two instances, not arithmetically twice. 2. These economists generally conclude that not income, but only consumption, should be taxed as the only "real" income. |
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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