ABSTRACT

"Unless savings are exempted from income tax, the contributors are twice taxed on what they save, and only once on what they spend.” An income tax differentiates against saving, by striking savings both when they are made and also when they yield their fruits. Clearly, however, in so far as the theory of double taxation of savings is a purely economic theory, it should be quite possible to take the view that no double taxation exists, and yet to affirm that savings ought to be less heavily taxed than under a certain given system of taxation. The coincidence of the economic and moral judgment in most discussions, suggests some confusion between the two aspects. In itself, the title "double taxation of savings" is far from being the purely neutral and scientific term which it is so needful to have in economic analysis.