This 1928 article develops Richard Strigl’s price-theoretic account of tax shifting. Across ten sections, he moves from a deliberately simplified static economy to dynamic questions of entrepreneurial profit, capital formation, rents, and transfer taxes. His central point is methodological: incidence cannot be read from the legal taxpayer or from administrative tax labels, but must be derived from the tax’s place in the economic process.
Da gerade bei der Lehre von der Steuerüberwälzung die Unterscheidungen, welche hier vorzunehmen sind, von größter Bedeutung sind, seien zunächst die theoretischen Grundlagen für unsere Untersuchung kurz entwickelt.
English translation: Since precisely in the doctrine of tax shifting the distinctions that must be drawn are of the utmost importance, let the theoretical foundations of our inquiry first be developed briefly.
Strigl begins with a static circular-flow model. Owners of labor, land services, and capital services sell productive means to entrepreneurs; entrepreneurs produce consumption goods; the same factor owners then buy the social product. Profit and loss are excluded so that tax effects can be isolated under competitive cost pricing.
Der Unternehmer kauft produktive Leistungen und verkauft Produkte zum Kostenpreise, einen Unternehmergewinn macht er hiebei nicht, ebenso wie er auch einen Verlust nicht erleidet.
English translation: The entrepreneur buys productive services and sells products at cost price; in doing so he earns no entrepreneurial profit, just as he likewise suffers no loss.
Within this model, Strigl rejects the simple idea that a tax can be mechanically “added” to the next price. A tax on a productive service changes the buyer’s effective outlay or the seller’s net return, and therefore changes demand, supply, output, and the distribution of burden.
Man kann leicht sehen, daß der Unternehmer nicht einfach den Betrag der Steuer auf den Preis des Produktes aufschlagen kann.
English translation: It is easy to see that the entrepreneur cannot simply add the amount of the tax onto the price of the product.
The consequence is a two-sided incidence theory. Whether the tax is formally paid by the buyer or seller, its economic burden depends on market conditions. A tax on a productive factor tends to reduce the use of that factor, lower the social product, raise the cost and price of the corresponding goods, and reduce the net return to factor owners. In limiting cases, the burden shifts differently: if supply is fixed, owners absorb it; if a factor’s net price is fixed by external market conditions, the burden appears in production costs. Consumption taxes and taxes at intermediate stages are treated by the same logic, as effects moving both backward to suppliers and forward to consumers.
The income tax receives a qualified treatment. In the static model, it is generally not shifted because purchasing power removed from private consumers reappears as state demand. Yet Strigl does not treat this as an absolute rule: if reduced real income changes the supply of labor, land, or capital, market prices may change indirectly.
Die herrschende Lehre nimmt mit Recht an, daß die Einkommensteuer im allgemeinen nicht überwälzt werden kann.
English translation: The prevailing doctrine rightly assumes that the income tax cannot, in general, be shifted.
The later sections introduce dynamics. Entrepreneurial profit, capital destruction, capital formation, differential rents, and transfer taxes cannot be understood within the pure static cost model alone. A tax on entrepreneurial profit, strictly understood as a residual surplus after costs, is not directly shifted in the same way as a tax entering production costs.
Die Steuer auf den Unternehmergewinn ist der Typus einer Steuer, welche nicht überwälzt werden kann.
English translation: The tax on entrepreneurial profit is the archetype of a tax that cannot be shifted.
But non-shiftability does not mean economic insignificance. Profit finances capital accumulation and attracts competition into profitable branches; taxing it may weaken both growth and the adjustment toward cost prices. Strigl’s final contribution is therefore to distinguish legal liability, immediate price incidence, and longer-run dynamic effects. Tax shifting is neither assumed nor denied in advance; it must be derived from the structure of production, the cost principle, and the concrete configuration of markets.
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