Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

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Title:: A statistical method for measuring "marginal utility" and testing the justice of a progressive income tax / Irving Fisher

Collection:: Economics Books

A STATISTICAL METHOD FOR MEASURING “MARGINAL UTILITY” 185 which, after cancelling S,, may, for mnemonic purposes, best be transformed into: Ss _ P/ps , Rs/Ry Si ¢/é1 ~ Fy/F, 3) where all the “3's” are vertically above corresponding “1’s.” Similarly, dividing the lower of equations (2) by the upper just as they stand, we get WR; WR; WF, or WF, which, after cancelling W,, may be written mnemonically, Ws _ R:/R; Wi FF, From (3) and (4), by multiplying and cancelling, we obtain Eo TRA af RTP WSs p2/ P3 Wis: ¢2/ b1 (5) Formule (3), (4) and (5) afford comparisons between Cases 1 and 3, both in Oddland; that is, they compare two families in exactly the same situation except that their incomes or expendi- tures, S; and S;, are different. Formula (3) compares their incomes. Formula (4) compares their wants-for-one-more dollar. As the want-for-one-more dollar decreases with an increase of income, one of these two rations. i and Ws Ss Ww, must be a proper fraction and the other, an improper fraction. Their product is given in Formula (5). Marginal Want for M oney and the Income Taz According to which way this product differs from unity, we have a justification for progressive or regressive taxation, while if their product is exactly unity, taxation should be neither pro- gressive nor regressive, but strictly proportional to income. This is all on the assumption that the tax is to be laid according to the principle of equal sacrifices to tax payers of different incomes. To show these propositions, suppose an income tax, or, to be unequivocal, a tax on expenditure, to be levied at the rate of ¢,

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