Ellen writes, > Isn't this ceding too much to the "double-taxation" position. > I mean yes it' true that the thrifty brother will pay more income > tax than his twin, but he will also earn more income (the interest on > saving in addition to the original income) than his twin.
I agree with you Ellen. But the double-tax perspective--which I'm trying to understand--seems to rely on the claim that the interest income is NOT truly income. They seem to claim that the interest earnings merely reflect the fact that a dollar next year is worth less than a dollar today. They use the interest rate to "discount" future income. This cancels out any interest payment as income. That is, I think that's the argument. Eric
