Professor Young on Index Numbers Get access Irving Fisher Irving Fisher Yale University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 37, Issue 4, August 1923, Pages 742–755, https://doi.org/10.2307/1884059 Published: 01 August 1923

A dollar constant in purchasing power is needed, 214. — The purchasing power of gold varies, 215. — The plan for a compensated dollar, 217. —The use of index numbers, 220. — No change in coinage, 222. — "Brassage" and redemption-bullion, 22. — Two prices of gold, m int-price and redemption-price, 227. — The plan briefly summarized, 228. — Illustration of its working if it had been adopted in 1897, 22.

Journal Article Professor Tuttle's Capital Concept Get access Irving Fisher Irving Fisher Yale University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 19, Issue 2, February 1905, Pages 309–313, https://doi.org/10.2307/1882867 Published: 01 February 1905

Journal Article Precedents for Defining Capital Get access Irving Fisher Irving Fisher Yale University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 18, Issue 3, May 1904, Pages 386–408, https://doi.org/10.2307/1884076 Published: 01 May 1904

“Cournot's genius must give a new mental activity to every one who passes through his hands.”—Marshall.

PROFESSOR HOTELLING has not questioned my reasoning, I am glad to note, but only the realism of the hypotheses employed, especially the hypothesis of rapid expansion. It is true, of course, that few such cases of rapid expansion as Henry Ford's could be cited. Nevertheless I believe Professor Hotelling's point is not well taken and for two chief reasons. (1) Though such high rates of expansion are relatively rare, they play a major role in the development of the country. (2) No such high rates are necessary to substantiate the realism of my contentions. As to (1) I will quote from my book' on the subject (which has come out since Professor Hotelling's manuscript was written).

IN THE JANUARY, 1937, number of ECONOMETRICA I had an article entitled in Theory and Income Taxation in Practice. One of its contentions was that to tax and later to tax income from those savings, involves a subtle form of double taxation. I had made this same contention in 1906 in The Nature of Capital and Income. Long afterward, through Professor E. R. A. Seligman, I learned that John Stuart Mill had also called attention to this double taxation. Apparently he was first to do so. Strange to say, such double taxation, though ably affirmed by many other writers, notably Marshall and Pigou in England and Einaudi in Italy, has not, to this day, been universally accepted. In a forthcoming book on Tax Spendings not Savings, I am including a general review of whole question-if question it be. In course of renewed study involved, I have gradually become conscious of a companion principle. Apparently it has hitherto been overlooked. This principle is that to tax works extensive destruction upon and spendings. Because of this destructiveness, several paradoxes emerge which have both theoretical and practical interest. In an article on this subject published in Taxes, the Tax Magazine, in August, 1941, I have excluded, as unsuitable for such a journal, underlying mathematics, merely asserting that contentions made can be mathematically demonstrated. The present article gives demonstrations referred to. At close of year zero, say 1900, let Co be value of a certain capital-for instance an automobile plant. Let j be rate at which this initial value Co would increase during first year (1901) without taxes; and, for simplicity, let us suppose that said rate continues uniformly for n years, at end of which period-say at end of 1940-the owner of capital dies. Then Coj would be capital-increase in dollars in first year (1901) (called savings in title to this article); and capitalvalue C1 at end of that year would be C1 = Co(l +j). At end of second year, capital value would be C2= Co (1 +j) 2; of rth year (1) C,r = Co(1 + )r,

BEFORE COMMENTING on Dr. Graves' note, I wish here to put on record a recent change in my own terminology. Dr. Graves quotes me correctly as having formerly said that capital increase is properly But since my efforts thus to restrict the use of the term to have met with little success, I have decided to capitulate on that point. In a book which I am preparing on What should be taxable income? I am suggesting that, paradoxically, we may avoid ambiguity by giving two meanings to income. One is or or simply yield. The other is servicesplus-capital-income or or simply enrichment (sometimes called accretion-sometimes earnings). This concession is made in deference to the fact that usage vacillates between the two concepts, and that both are useful. They are well exemplified in the stock market in the yield of a stock as contrasted with its earnings. I am also prompted to make this change by the hope of helping to lift the discussion of income from the level of words to the level of ideas. Apart from terminology, however, I have seen no reason since 1897 to change my attitude. Nor do I find anything in Dr. Graves' discussion which would incline me to change it. In summarizing my conclusions, Dr. Graves is likely to mislead many readers: (a) They may not understand that in what he calls my assumption (2) negative psychic services were omitted explicitly in order to create a simplified case-just as he himself makes various assumptions to create his five special cases. In my ECONOMETRICA article, negative psychical services were far from overlooked or disregarded. But I was leading up to the problem of taxation in which negative psychical services have to be either neglected or treated by rule of thumb.' (b) The same is true of his reference to my assumption (5) to the effect that services are worth their cost. In my article, much attention was given to the discrepancies between the worth of services or uses and money cost. But, with his eye on only my most simplified case, Dr. Graves remarks: