ABSTRACT
This chapter examines the dilemma between the need for increased capital formation on the one hand and on the other the desire for more even distributive share of income and wealth. Changes in the share of wages and salaries in the national income can be taken as an approximate reflection of changes in the distribution of income between wage and salary earners as a group and other income groups. The adverse effects of company savings on the structure of wealth can be avoided to the extent that capital formation is based on increased personal savings. The observed constancy of savings habits and the rather fixed relationship between income and the propensity to save limit the scope for and effective operation of measures to timulate saving. Taxes and certain types of welfare funds—though rarely viewed as such—are forms of collective savings. The former goal, rapid economic growth, requires a generous capital formation.
