The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

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

612 APPENDIX the seller nor the purchaser. It is an instance of the effects of a tax being injurious to those who do not pay it, rather than to those who pay. In so far as the parties to the transaction are concerned, the result of the decrease of sales of real estate, for instance, is to lower the selling value of the land. For any impediment to the free trans- fer of a commodity is bound to diminish its relative desirability or value. The purchaser indeed pays the tax but he will recoup himself by paying so much less for the land. Were there no tax he would be willing to pay a larger price. The result hence is that the tax is capitalized or amortized into a lower selling price of the land and it is only the original owner who possesses the land before the tax is imposed or increased, who suffers. After the tax has been in existence long enough for the original owner to part with his land, the new owner as a consequence of the absorption of the tax will not suffer, “This kind of capitalization or amortization, however, differs from the ordinary phenomenon discussed above. For ordinarily capitaliza- tion depends on the regular recurrence of a tax and can be ascertained by the simple arithmetical process of capitalizing the difference be- tween the present and the future income. In the case, however, of taxes or the transfer of real estate, while the tax indeed recurs, the recurrence is at irregular intervals and the depreciation consists in the capitalization of an unknown quantity. This very uncertainty contributes to render real estate values unstable and in itself would suffice to explain the absence in France of such an important class of operators as the “real estate interests” in large American cities. “The same considerations which have just been mentioned apply, with some modifications, to the taxes on stock- and produce-exchange transactions. The process, however, is even more subtle and com- plicated. “The ordinary view of such taxes is that they are borne by the respective parties in interest—the buyers and sellers of securities or the speculators on the bull or the bear side in produce so that the tax may really be considered as a tax on speculation or on the un- earned or fortuitous profit of the speculator. A tax on stock- and produce-exchange transactions would thus be a tax on speculative profits. “In reality, however, it is nothing of the kind. The results are quite different. “The real function of speculation, as has been abundantly shown by modern economists, and as has recently been explained in detail in the admirable report of the special commission on the exchanges

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