The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Income

Collection:: Economics Books

Sc. 8] INCOME ACCOUNTS 135 that its discussion will be postponed to Chapter XIV, where it may receive the attention it deserves. We con- tent ourselves at present with a preliminary illustration. A savings bank depositor is sometimes thought to draw income from his deposit when the interest “accumulates.” This is an error. He draws income when, and only when, he draws money out of the bank; he suffers outgo when, and only when, he puts money into it. If he merely lets his deposit accumulate, he derives no income and suffers no outgo. There is no effect on income. What does occur is increase of capital. He cannot have his cake and eat it too. If we make the fiction that the man who allows his savings to accumulate virtually receives the interest, we must, to be consistent, also make the fiction that he rede- posits it. If the teller hands over the interest across the counter, the depositor’s account certainly yields up “in- come” to him, but if he hands it back it must, in consist- ency, be charged as “outgo,” and the net result on his income is simply a cancellation. This procedure reveals clearly the fact that the accumulation is not income. §8 The method of accounting employed in the preceding lawyer's account is, of course, not the only, nor is it the usual, method. It is the method, however, which shows the shares of the total income attributable to each indi- vidual source. In practice, the minor sources of income are neglected. The income and outgo of one’s “cash” almost balance in the long run, and the same is true of the lease, the servants’ contracts, and the household sup- plies. One's furniture probably yields a larger net income than is commonly realized, but even this is usually a small element in the total. It is only in case the lawyer lives in his own house that a serious correction would need tobe made on this account. In this case, his shelter is not offset by ~mv rent payment, and enters the accounts as pure income.

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