Knowledge that Transforms

I. Economic movements and population movements: personal capital, 572; emigration and migration, 576; non-economic factors, 577; the time factor, 578; primitive cultures and the ancient world, 579. — II. Wealth per capita and population: time and space, 582; secular increase, 583; class rates of mortality and natality, 583; social and political institutions, 583. — III. Determinants of population growth: the genesic forces, 585; the non-genesic forces, 587; residues, 592. — IV. Malthus' theories, 593. — V. Demographic trends: long-run influences, 598; the future, 600.

Taxation and the Conservation of Resources Get access The Quarterly Journal of Economics, Volume 58, Issue 2, February 1944, Pages 157–195, https://doi.org/10.2307/1883316 Published: 01 February 1944

Significance of the problem, 246. — Opposition in elections relatively infrequent, 248. — No relation between opposition and method of election, 251. — The International Typographical Union: sub-lists, 253; the Brotherhood of the Union of North America, 255; the Wahnetas, 257; the Progressive Party, 258; election campaigns, 259; reasons for political divisions, 262.— Conclusions, 263.

I. The problem: quantitative relationship between the primary demand for particular products and total output and employment, 290. — II. Technological relations assumed, 294. — The resulting equations, 296. — Computing employment, 297. — The concept of final demand, 298. — III. Computation from American data for 1939, 299. — IV. Applicability of these results to data for 1929, 304. — Explanation of discrepancies, 308. — V. Relationship between final purchases of particular commodities and total employment, 311. — Appendix, 313.

A new theorem: consumers harmed by price stability, 602. — I. Related propositions: consumer's surplus and price stability, 602. — II. The general case, 605. — III. Indifference curve analysis, 606. — IV. The theorem in its most general form, 608. — V. The meaning of the above results: "common sense, " 609; offsetting price changes, 609; semi-luxuries, 610; extreme cases, 610; producers or sellers, 610; character of the demand function, 611; quantities sold, 611; adjustment of expenditures, 613; advance knowledge of prices, 613.

I. Summary and conclusions, 388. — Loss offset provisions, 391. — II. The rationale of investment behavior: yield and risk defined, 393; yield and risk of an asset combination, 398; investor's indifference map and investment equilibrium, 402. — III. Taxation without loss offset: effects of the tax on yield and risk, tax sensitiveness, 403; adjustment of asset combination held, 405. popular versions of the argument, 408. — IV. Taxation with full loss offset: effects on yield and risk, 409; total risk and private risk distinguished, 410; adjustment of asset combination held, 411; total risk increased as result of tax, 412. — V. The general case, taxation with variable loss offset: effects of varying tax rate and varying loss offset, 415; adjustment of asset combination to changes in tax rate, with given loss offset, 418; adjustment to changes in loss offset, with given tax rate, 419. — VI. Qualifications, 421.

The article presents information on accounting theory and its current problems. Accountants who have been concerned with a more precise phrasing of accounting theory have attempted to formulate standards by which the bulk of accounting procedures may be guided. A consistent framework of standards is needed to serve as a basis for judgment in constructing and interpreting financial statements. Accounting standards should be systematic and coherent, impartial and impersonal and in harmony with observable, objective conditions. The responsibilities of the profession have increased, so has the profession's independence. If it should be emphasized, which is perhaps not necessary: (1) that the reporting of periodic income should include, as a regular element, charges to provide for the payment of refunds or additional costs of a period and (2) that full reliance upon the genuineness of the need for the charge and the honesty and accuracy of the estimate would be given if a certified public accountant subscribed to the figures, then the independence of the accountant would be further strengthened and the usefulness of this reporting improved. The acceptance of such a position by writers on theory would have an important secondary result in that it would provide a better integration of auditing practice and accounting theory.

The article highlights the role and function of internal auditors. The author discusses fundamental factors which have caused industry to promote internal auditing to a key position in the general scheme of internal control. During 1940s, various management aspects were handled by different employees of the firm. Industrial management adopted these and many other new techniques to combat certain basic shortcomings in big business enterprise. With its origin in the accounting field, internal auditing derives its distinctive position in the sphere of managerial control from a series of peculiar characteristics which are not common to other staff departments within the organization or to public accounting staffs. In other words, these qualities make internal auditing a tool for the management in establishing and maintaining enlightened internal control. The first of these inherent characteristics is prejudice, partiality, bias, or loyalty. Compared with the public accountant, the internal auditor is partial toward the company under audit because his client is his employer.

In support of the theory of renegotiation, the author has mentioned a concept which was not developed last year. It has been a great many years since the theory was developed that the government had the right to regulate and fix the prices of services of public utilities, that is,of businesses which are vested with a public interest. Under that theory, innkeepers and common carriers were regulated a century and a half ago. More recently, the railroad, electric, gas, telephone, telegraph, warehouse, bus and other businesses have been regulated. In wartime, there is virtually a state of monopoly because the government needs everybody's services so badly that competition does not exist. It needs the product of every plant and must have it at whatever price. Certainly the government and the well-being of the public are sufficiently dependent upon the results of the production of war material that it cannot be said that such production is not vested with a public interest. The Revenue Act of 1943, after four rather complete and comprehensive Congressional investigations of renegotiation, substantially amended the Renegotiation. Act.

Everyone is more or less reconciled to the prospect of a relatively large Federal budget in years ahead. No one expects that taxes will be greatly reduced immediately even if and when the happy day comes which sees free spenders kicked out of seats of authority. But the burden of taxes is not to be described merely in terms of the amount of money collected. The total burden includes the cost of compliance on the part of taxpayers and administrative costs incurred by the government. In constructing a system of taxation a serious effort should be made to minimize this additional burden, the taxpayer should be separated from his money with the least possible bedeviling, harassment, and expense. The system, however, could hardly be worse if deliberately designed to maximize the direct and indirect cost of compliance, and to produce gross inequities to boot. No one is in a position to estimate in dollars the amount of the annual burden which represents a total loss to the national economy in the form of excessive compliance cost, but that this unnecessary load is a serious matter can not be questioned.