A Caltech Library Service

Taxation of income from capital: A theoretical reappraisal

Strnad, Jeff (1985) Taxation of income from capital: A theoretical reappraisal. Stanford Law Review, 37 (4). pp. 1023-1107. ISSN 0038-9765.

Full text is not posted in this repository. Consult Related URLs below.

Use this Persistent URL to link to this item:


This article shows that the traditional mapping between tax bases and tax treatments for investment and borrowing transactions is deeply flawed. In a non-general-equilibrium setting where the effect of taxes on pre-tax prices is not included in the analysis, I show that the cash flow income tax and not the traditional income tax implements the Haig-Simons ideal. Furthermore, in the same setting the cash flow income tax is not equivalent to yield exemption.

Item Type:Article
Related URLs:
URLURL TypeDescription
Additional Information:© 1985 Stanford Law Review. I would like to thank Mike Graetz and Bob Hahn for their helpful comments on this article and Joshua Stein for his able research assistance. An earlier version of this article was presented 1985 annual meeting of the Public Choice Society and at workshops at New York University Law School and the University of Southern California Law Center. I am grateful to participants for their comments. Several of my colleagues made helpful and extensive suggestions outside of the workshop context: Joe Bankman, Dick Craswell, Norman Lane, Alan Schwartz, Chris Stone, and Jerry Wiley. Finally, I am indebted to Jeff Gordon, Mark Kelman, Bill Klein, Roberta Romano, Susan Rose-Ackerman, and Jim Snyder for their suggestions on the draft immediately preceding publication. All errors are my own. Work on this article received substantial financial support from the U.S.C. Law Center Summer Research Fund for 1983 and 1984. Formerly SSWP 526.
Funding AgencyGrant Number
USC Law Center Summer Research FundUNSPECIFIED
Subject Keywords:Taxes, Income taxes, Tax base, Investment return rates, Investment tax credits, Taxpaying, Capital income, Financial investments, Taxation, Yield
Issue or Number:4
Record Number:CaltechAUTHORS:20171130-160229709
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:83613
Deposited By: Jacquelyn Bussone
Deposited On:01 Dec 2017 18:23
Last Modified:03 Oct 2019 19:08

Repository Staff Only: item control page