Sunday, December 18, 2016

194 Taxation

The Austrian economist, Joseph Schumpeter, described Gladstonian finance in his History of Economic Analysis:

... there was one man who not only united high ability with unparalleled opportunity but also knew how to turn budgets into political triumphs and who stands in history as the greatest English financier of economic liberalism, Gladstone. ...

The greatest feature of Gladstonian finance ... was that it expressed with ideal adequacy both the whole civilisation and the needs of the time, ex visu of the conditions of the country to which it was to apply; or, to put it slightly differently, that it translated a social, political, and economic vision, which was comprehensive as well as historically correct, into the clauses of a set of co-ordinated fiscal measures. ... Gladstonian finance was the finance of the system of 'natural liberty,' laissez-faire, and free trade ... the most important thing was to remove fiscal obstructions to private activity. And for this, in turn, it was necessary to keep public expenditure low. Retrenchment was the victorious slogan of the day ... it means the reduction of the functions of the state to a minimum ... retrenchment means rationalisation of the remaining functions of the state, which among other things implies as small a military establishment as possible. The resulting economic development would in addition, so it was believed, make social expenditures largely superfluous. ...

Equally important was it ... to raise the revenue that would still have to be raised in such a way as to deflect economic behaviour as little as possible from what it would have been in the absence of all taxation ('taxation for revenue only'). And since the profit motive and the propensity to save were considered of paramount importance for the economic progress of all classes, this meant in particular that taxation should as little as possible interfere with the net earnings of business. ...

As regards indirect taxes, the principle of least interference was interpreted by Gladstone to mean that taxation should be concentrated on a few important articles, leaving the rest free. ... Last, but not least, we have the principle of the balanced budget

Saturday, December 17, 2016

Friday, December 16, 2016

Tuesday, December 6, 2016

191. Learning Resources

Saturday, December 3, 2016

190 Economics - The importance of Institutions

MR University - A must see for SA policymakers: