We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
A Comparison of the Distributional Effects of Inflation and Taxation.
- Authors
Pesek, Boris P.
- Abstract
Only one attempt has been made to empirically evaluate the burden of inflation. The distributional burden of inflation by measuring the monetary assets and liabilities of various income groups is estimated. They have shown that while the government sector is the most important net debtor, the household sector is a net creditor. This is true about the sector as a whole and about each income group within this sector. Different income groups were discovered to have different ratios of monetary assets to liabilities. The closer this ratio is to unity, the smaller is said to be the loss caused by inflation. The conclusion that everybody loses by inflation in proportion to his net money assets is not fully satisfactory, because it rests on the implicit assumption that the alternative to the burden of inflation is no burden at all. Even if inflation originated completely with the consumer and thus could be prevented by the use of self-restraint, the burden of the additional self-restraint needed to prevent inflation would have to be taken into consideration. In this paper the author compares the distributional burden of inflation with the distributional burden of taxation. Three types of taxes will be considered: income tax, sales tax with food not taxable, and sales tax with food taxable.
- Subjects
PRICE inflation; PRICE inflation &; taxation; EFFECT of inflation on income; TAXATION; ECONOMIC forecasting; SUPPLY &; demand; SALES; WAGE taxation; INCOME
- Publication
American Economic Review, 1960, Vol 50, Issue 1, p147
- ISSN
0002-8282
- Publication type
Article