The nature of capital and income

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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

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APPENDIX TO CHAPTER XIV 401 entirely just if the impairment of one capital were always offset by the equal increase of some other capital, z.e. if the taxpayer's total capital-value were kept at the same level. In general, large receipts are usually reinvested and should therefore not be subject to the income tax at all. If we could assume such reinvestment to be the invariable rule, we could approve of the system by which, in England, a terminable an- nuity is not taxed as income at its full value, but is taxed only on that part of it which constitutes “interest.” The other part, which constitutes impairment of principal, is not taxed. The system, of course, fails of justice in cases where this impairment of principal is never restored in some other form of investment but ultimately represents, like the other part of the annuity, through personal expenditure, final enjoyable income. To illustrate the English exemption of impairment of capital, if $1000 is paid for a five-year annuity on a basis of 4 % inter- est (reckoned semi-annually), it will purchase an annuity of $111.33 at the end of each six months, and the following will be the schedule showing the capital-value at each interval, the interest accruing upon it, the payment to the beneficiary, and the impairment of capital resulting. CAPITAL | INTEREST ToraLn IMPAIR- | CAPITAL AT BEGIN-| ACCRUED | PAYMENTS | MENT OF | LEFT AT NING AT END AT END | CAPITAL Exp 1st half year . . . . [$1000.00 $20.00 [$111.33 $91.33) $908.67 2dhalf year :. ......x 908.67 18.17 111.33 93.15] 815.52 8d hall-year . . . . 815.52] 16.31 111.33 95.02] 720.50 4th balf year , . . . 720.50] 14.41 111.33 96.92 623.59 Sth haf year’. . . . 623.59) 12.47 111.33 98.86] 524.73 6th half year . . . . 524.73] 10.50 111.33 100.83] 423.90 Th half year “2 Wn 423.90 8.48 111.33 102.85) 321.05 8th half year . . . . 321.05 6.42 111.33 104.91] 216.15 Othohalf year... ... ..iis 216.15] 4.32 111.33 107.00] 109.14 10th hall year . . . 109.14) 2.18 111.33 109.14] 000.00 $1000.00 If at the start he has a capital of $1000, at the end of the 1 From Institute of Actuaries’ Text-book, Part I, “Interest,” by Ralph Todhunter, p. 57. London (Layton), 1901. 2p lo Bi ¥ % a NS TN rc a a Mae,

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