A Monetary Case for Value-added Negative Tax

Real-World Economics Review 2015 (70):80-91 (2015)
Download Edit this record How to cite View on PhilPapers
We address the most fundamental yet routinely ignored issue in economics today: that of distributive impact of the monetary system on the real economy. By re-examining the logical implications of token re-presentation of value and Irving Fisher’s theory of exchange, we argue that producers of value incur incidental expropriation of wealth associated with the deflationary effect that new value supply has on the purchasing power of money. In order to remedy the alleged inequity we propose a value-added negative tax (VANT) based on net individual contribution to the economic output, which is structured as a negative tax function geared to profits derived from eligible productive activities in consideration of their estimated deflationary impact. We show that an adequately optimised VANT can be non-inflationary and have zero net cost to the public. Furthermore, economic output stands to improve due to direct incentivisation of value creation, making the proposed scheme not only politically feasible but economically desirable. The proposal advances the principle of ‘fair money’, where all forms of economic value are attributed to their rightful owners prior to any positive taxation.
PhilPapers/Archive ID
Revision history
Archival date: 2020-01-08
View upload history
References found in this work BETA
Capitalism and Freedom.Friedman, Milton

Add more references

Citations of this work BETA

No citations found.

Add more citations

Added to PP index

Total views
23 ( #44,843 of 46,294 )

Recent downloads (6 months)
23 ( #31,675 of 46,294 )

How can I increase my downloads?

Downloads since first upload
This graph includes both downloads from PhilArchive and clicks to external links.