Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support

The Double Taxation of Savings

Irving Fisher
The American Economic Review
Vol. 29, No. 1 (Mar., 1939), pp. 16-33
Stable URL: http://www.jstor.org/stable/1806984
Page Count: 18
  • Download ($10.00)
  • Subscribe ($19.50)
  • Cite this Item
If you need an accessible version of this item please contact JSTOR User Support
The Double Taxation of Savings
Preview not available

Abstract

When savings are taxed as a part of income, there is a species of double taxation, because, as John Stuart Mill said, the "saved part of income thenceforth pays income-tax on the interest or profit which it brings, notwithstanding that it has already been taxed on the principal." For this reason the proposal of Professor Haig and others to tax "accretion," which includes savings, is inadvisable. A far preferable reform would be to tax "yield," or net paid income, after deducting all outgo for savings and investments. This would be equivalent to taxing "spendings" for consumption goods, as proposed by the late Ogden Mills. The "accretion tax" includes a tax on growing capital value or earning power. To be logical, it should include a tax on the yearly increase in capital value of the personal earning power of a young man. This would require complicated and-impractical appraisals--to say nothing of the many other appraisals, such as appraisals of appreciation and depreciation of all sorts. The yield tax, on the other hand, avoids appraisals altogether. But its fundamental virtue, of course, is its fairness. By avoiding double taxation, it squares with capacity to pay.

Page Thumbnails

  • Thumbnail: Page 
16
    16
  • Thumbnail: Page 
17
    17
  • Thumbnail: Page 
18
    18
  • Thumbnail: Page 
19
    19
  • Thumbnail: Page 
20
    20
  • Thumbnail: Page 
21
    21
  • Thumbnail: Page 
22
    22
  • Thumbnail: Page 
23
    23
  • Thumbnail: Page 
24
    24
  • Thumbnail: Page 
25
    25
  • Thumbnail: Page 
26
    26
  • Thumbnail: Page 
27
    27
  • Thumbnail: Page 
28
    28
  • Thumbnail: Page 
29
    29
  • Thumbnail: Page 
30
    30
  • Thumbnail: Page 
31
    31
  • Thumbnail: Page 
32
    32
  • Thumbnail: Page 
33
    33