ABSTRACT
This chapter deals with protection of property rights, and that is certainly vital in a market system. It also deals with taxation of “saving” and is inclined toward a consumption tax. A consumption tax also discourages labor, however, and encourages nonmarket activity and leisure. The chapter discusses the cost of saving versus the cost of consumption is raised two and a quarter times by taxes. Private saving would and should in any event be encouraged to reach its maximum potential by providing the framework for a fully employed private economy with maximum income. High taxes on the income from saving suggest a substitution effect against saving. But income effects might increase saving to the extent that people find they have to abstain from more current consumption in order to provide the future consumption they wish.
