Index:
I. Introduction 2
II. Introducing the problem 2
III. Income vs. Consumption Tax 3
IV. A just tax base? 5
V. Liberutopia 6
VI. Conclusion 8
VII. References 9
Table of Figures:
Figure 1: Consumption vs. income tax 3
Figure 2: Floating money and deposit money 4
I. Introduction
In the debate of just taxation an argument came up, which insisted that any tax that distorts individual preferences should be considered as unjust. This argument is known as the "fairness-to- savers-argument". The intention of this essay is to explain of what the fairness to savers argument consists, how to approach it and foremost why it is wrong.
At first I will therefore explain the argument on the basis of it's most common example. The following chapter will then provide a better insight into to exact circumstances, under which the fairness to savers argument might arise. Here the functionalities of the, in the example presented, tax bases will be addressed. To approach the rejection of the argument correctly, it will be necessary to determine what exactly "just" means and this will lead us to some assumption, which need to be made to prove the argument wrong. But before that, I will present the approach Murphy and Nagel make in their book "The myth of ownership" and why they are not able to reject the argument completely. Afterwards I will introduce my approach, which basically will show, that any kind of taxation w ...