Just Taxation :: essays research papers

IndexI.Introduction2II.Introducing the problem2III.Income vs. ingestion Tax3IV.A just tax base?5V.Liberutopia6VI.Conclusion8VII.References9Table of FiguresFigure 1 drug addiction vs. income tax3Figure 2 Floating money and deposit money4I.IntroductionIn the debate of just taxation an business came up, which insisted that any tax that distorts individual elections should be considered as unjust. This argument is known as the fairness-to- survivers-argument. The intention of this essay is to explain of what the fairness to savers argument consists, how to approach it and inaugural why it is wrong.At first I forget therefore explain the argument on the basis of its most common example. The following chapter allow then provide a better insight into to exact circumstances, under which the fairness to savers argument might arise. Here the functionalities of the, in the example presented, tax bases will be addressed. To approach the rejection of the argument correctly, it will be ne cessary to determine what exactly just means and this will lead us to some assumption, which carry to be made to prove the argument wrong. But before that, I will present the approach Murphy and Nagel make in their book The fabrication of ownership and why they are not able to reject the argument completely. Afterwards I will introduce my approach, which basically will show, that any loving of taxation will distort individual preferences and there from I derive, that the fairness to savers argu-ment must be invalid.II.Introducing the problemThe basic problem of the fairness to savers argument, is the effect of contrary tax bases on individual preferences. The name of the argument follows from its most vivid example, which I want to address at first, for a better agreement of the issue. The example is often illustrated with the comparison between two individuals preference for saving, both taxed once under an income tax and once under a consumption tax. permits consider two peo ple, Steve and John, both earn in t0 100$, the rate of return is in every period constantly at 10% and they are in every aspect totally similar, despite their individual time preference, which is for Steve at 3% and for John at 9%. That means exactly, that Steve is unforced to save his money as long he gets at least a net return rate of 3% and John is willing to save his money as long he gets at least a net return rate of 9%. In case their time preference is higher than the net return rate, the utility they derive from immediate consumption will be greater than the utility they derive from saving, thus they wont save their money.