Talk:Income/Archives/2012

Different definitions for personal/corporate income

This page appears to offer two different definitions of "income": a definition of the income of an individual person, on one hand, and a definition of the income of a corporation, on the other. I'm wondering if people take this perception to be correct, and, if so, if there should indeed be two different definitions.

To make things concrete, let's consider an individual living in a tax-free society whose paychecks sum to $10,000 per year. Let's say that said individual spends $5,000 per year on rent, $4,000 per year on food, and saves $1,000 per year.

Now the article defines what an individual person's income is by example: "For example, most individuals' income is the money they receive from their regular paychecks." Under this definition, our individual's "income" equals the value of the paychecks, or $10,000.

On the other hand, the article defines a corporation's income as follows: "the amount of money that a company earns after paying for all its costs." Now it appears that our individual is paying housing costs of $5,000 and food costs $4,000, which total to $9,000 in total costs. If we apply the corporate definition to our individual, then, his "income" is earnings - costs = $10,000 - $9,000 = $1,000.

Is there something wrong with the latter calculation? --Ryguasu 02:49, 27 Nov 2004 (UTC)

The definition given within the main body of the article is not correct for it lists wages within the definition of income. A wage is a bartering of ones efforts in a direct exchange for something else. Earning a wage is a right given to a citizen by their Creator, not a privelage given to a citizen by the state. Also, the definition provided within the article points to a book used in the education system. Income, where it meets up with the IRS can only be defined by the Supreme court. The supreme court ruled that income and wage are two very different things. The IRS does not set law, the Consitution and the Supreme Court sets the law. Also, you may wish to show that State income is defined different than Federal. Where the IRS is concerned, the Supreme Court is the master. So far the IRS has gone rogue and has abandoned following the law. Bottom line is, your definition given in the article for "income" is incorrect. Eric George Nordstrom (talk) 00:44, 14 July 2008 (UTC)

Merge tags

I am going to remove the mergefrom tags (unearned income and passive income). While the organization between the three articles might not be great, passive and unearned income are specific topics and, more importantly, aspects only of personal income which is not really discussed in this article now anyway... I don't think the articles as they stand belong in this -- a general discussion of income as an accounting concept, clarifying the usage of the term income in accountancy from that regarding wages. More important than my feelings, though, is the fact that the tags have been up for two months and no one has argued for or against them, justified their emplacement, or actually performed the merge. BryanHolland

Here are some more pages that have been tagged "for two months and no one has argued for or against them, justified their emplacement, or actually performed the merge": Jamaican People and Washout and Washout#Jamaican culture. Perhaps you'd like to remove those tags, too? Ewlyahoocom 05:45, 16 April 2006 (UTC)

Economic Theory of Income

Readers may find it debatable that Alfred Marshall made it difficult to study income. My argument is based on rather serious analysis, so please do not remove it, but propose criticisms of this view for a balanced presentation. Here is the gist. In real markets, buyers and sellers agree both on the quantity and on the price. A proper analysis of the market must therefore explain the simultaneous determination of both the quantities and prices (while the quantity multiplied by price gives value, which is income for the seller and expenditure for the buyer). The input-output model can actually accomplish this simultaneous determination.

Mainstream economics is disputed, and wiki articles should not suppress legitimate criticisms of mainstream views. 70.31.37.205 21:33, 27 April 2006 (UTC)

The article presents this material elsewhere and in more meaningfully and usefully. Mainstream economics is disputed, but assertions like "Marshall made it hard to study income" and "Sadly, the role played by money and the financial sector in promoting output/income growth remains disputed" are totally unencyclopaedic and inappropriate. El T 15:21, 21 July 2006 (UTC)

How did Marshall make it hard to study income?

Marshall proposed that equality of demand and supply determines price, while his able pupil Keynes denied this and started a new revolution. The Keynes contention is that equality of demand and supply determines real output/real income, not price. It is a sad story indeed that our friend [User:El T|]is not well informed of the history of economic theory to see the problem. What gives him the scholarly ability to determine if this assertion is encyclopaedic or appropriate is not known to me.

Either Marshall or Keynes but not both can be correct regarding what is determined by the equality of demand and supply. It will be useful if the author of the objection could reconcile this two mutually inconsistent views of Marshall and Keynes. Historically, Keynes is widely regarded as the author of theory of income, which is called macroeconomics by many.Gani 08:13, 27 August 2006 (UTC)

How is the role played by money and the financial sector in promoting output/income growth remain disputed?

This is again a matter of perhaps too high theory. Our friend is certainly unaware of the scholarly work of Amasa Walker (1865)or Richard Whately (1832) or perhaps even of Ludwig von Mises (1933) who show that money affects real output by being a necessary means of payment. There are authors who think of money as a unit of account. They include Irving Fisher the author of quantity theory of money, Milton Friedman the author of a restatement of quantity theory or Robert Lucas Junior the proponent of rational expectations in monetary matters. They think that money is neutral with respect to output. Keynes created the big controversy about whether money does or does not affect output: he claimed that it did affect output. It is quite strange: the history of macroeconomics is in its core a history of precisely this dispute: does money affect output or not? To suppose that mentioning this dispute is inappropriate is certainly impossible for anyone who knows anything about the history of macroeconomics or monetary theory.

If the buyer has to actually hand over something called money to serve as a payment, then logically the output traded against money is not independent of money. However, if money is not a means of payment (and hence never changes hands) but is simply a unit of account to measure the nominal value of output, then it does not matter if the amount of money is quoted in one dollar or 100 cents, namely, in whatever arbitrary units. Old and new versions of quantity theory of money (as enunciated by Fisher, Friedman, Lucas) treat money as just a unit of account and certainly not as means of payment. It is a scandal that the author who does not know about this dispute takes the decision to announce that the mention of a such a dispute is inappropriate and unencyclopaedic.

The dispute is between the role of money as a means of payment and the role of money as a unit of account. There are hundreds of books and thousands and thousands of journal articles about this dispute. One should at least read one book such as by Triffin. Has the author any idea what the journal of money and banking have published over the last several decades on the dispute? Has he ever heard the names of the most prominent scholars on the issue? I know that wikipedia articles are meant for the readers who are first readers and are not supposed to know much. But can an author of such articles be also a novice who writes without enough exposure to the literature? (Is there any legitimate need to list the Universities where I have taught over the last three decades?

The freedom of expression includes the freedom to express or reveal ignorance. But it is sordid to see that this freedom is being abused by people who should probably first read something before teaching others.

what is the differences between accounting income and economic income

Guys i am not one to modify anything or start anything, but i would request someone look at this info and if felt acccurate amend this page according.

For purposes of Income Tax

Income means:

Black's Law Dictionary: Income. "The return in money from one's business, labor or capital invested; gains, profits or private revenue."

Webster's Dictionary: Income. "A gain or recurrent benefit usually measured in money that derives from capital or labor"

this simple meaning is VERY relevent.

So please edit page accordingly

69.245.136.69 23:55, 2 August 2007 (UTC)

It's not accurate. — Arthur Rubin | (talk) 00:46, 3 August 2007 (UTC)

But it is precise. — N0 D1C4 05:23, 3 August 2007 (UTC)

Will the Master of the income page set it right?

Bobhurt and his sock puppet BobHurt have been blocked. See [1] and [2]

While of course everyone should assume WP:GOODFAITH, Bob has stated his only reason for posting this and things similar was as a complaint against the government.

You can complaint [sic] against government (if you do it the right way) at Wikipedia. I have written lots of complaints at the US income tax discussion pages, and much of the content is still there.

[3]

Since this was not WP:GOODFAITH, it is deleted.

This is not even an accepted meaning. Perhaps if the section were titled "Meaning of income to tax protesters", it might be appropriate as written. But I'm not convinced it belongs in this article, even so. — Arthur Rubin | (talk) 16:01, 4 September 2007 (UTC)

Dear Bob Hurt: For the gazillionth time, please refrain from making personal attacks. Comment on the material, not on your fellow editors. And I wonder why you are referring to me as a "Dallas Texas" attorney.

Regarding your statement that the United States Supreme Court "do[es] not constitute a valid authority, even though the[y] constitute the best this nation has to offer" -- thanks for sharing that with us, but under the U.S. legal system the courts, not Bob Hurt, are authoritative on decisions about what the law is.

Regarding the Stratton case, you might want to go back and actually read the case itself more carefully.

The argument:

While the compensation received might appear as income because it did "come in", it does not constitute gain because in order to earn it, the person expended "outgo" through application of labor or intellect.

-- is legally frivolous tax protester rhetoric. The courts have uniformly rejected these kinds of arguments. Yours, Famspear 17:07, 4 September 2007 (UTC)

OK, I'll save you the trouble on the Stratton case, Bob. In Stratton's Independence, Limited v. Howbert, 231 U.S. 399 (1913), a mining corporation argued that the 1909 corporation tax act did not apply to that corporation. The U.S. Supreme Court ruled that the 1909 corporation tax act did apply to mining corporations, and that the proceeds of ores mined by the corporation from its own premises were income within the meaning of the 1909 tax act. The Court also ruled that the corporation was not entitled to deduct "the value of such ore in place and before it is mined" as depreciation within the meaning the 1909 act. Nowhere in this case or any other case has any Federal court ever ruled that, as a general proposition, compensation for personal services performed by an individual is not taxable. The issue never even came up in the Stratton case.

Oh, by the way, I am not a "moderator" in Wikipedia. Wikipedia does not have "moderators." (I'm not an administrator here either, by the way.) Yours, Famspear 17:31, 4 September 2007 (UTC)

Oh, and Bob Hurt, what exactly is a "master" of the "income" page? That's how you referred to me. As far as I can tell, I've never even edited the article, and as far as I can see I've never posted a comment on this talk page until today -- and that was in response to your personal attack against me. Famspear 18:34, 4 September 2007 (UTC)

Full income

Is this concept notable or, in fact, sourced? Should it, perhaps, be a separate article if it is sourced, rather than taking over the dominant definition of income. Someone help me on this. — Arthur Rubin (talk) 13:15, 19 March 2008 (UTC)

The lead was changed to:

Income, commonly refers to monetary income, though full income refers the monetary and non-monetary consumption ability of any given entity, such a person or household. According to the widely used and accepted 1938 Haig-Simmons definition, "income may be defined as the... sum of (1) the market value of rights excerised in consumption and (2) the change in the value of the store of property rights..." Since full-income, which consists of all consumption potential, including the potential to consume leisure, cannot be measured, monetary income is used as a proxy and for the sake of simplicity simply refered to as "income." Thus, generally defined, income is the money that is received as the result of normal business activities of an individual or a business.

As the final sentence is not sourced by that reference, I'm reverting and editing it into another section. — Arthur Rubin (talk) 13:53, 19 March 2008 (UTC)

A google search for "Haig-Simmons" finds mostly tax protester web sites, basically saying that, since not all "Haig-Simmons" income is taxable, it must be the case that not all income under the standard definition is taxable. I'm not necessarily saying it's not notable, but it needs more evidence to be broken out in the lead. — Arthur Rubin (talk) 14:03, 19 March 2008 (UTC)

It is the dominant, and not an alternate, definition of income; the intro now tells us why we focus on monetary income, i.e. why we only use part of the concept in daily transactions. But income in itself refers to any and all consumption opportunity. Telling readers that this "an alternative" definition is misleading. The current reference is a widely used post-secondary economics textbook, I may search JSTOR, though that isn't needed for inclusion here. The Haig-Simmons defintion is simply one of several that is representative of what the term actually means. Too many people mistakenly beleive that "income" only refers to monetary income, but such is not the case. In an article on "income" (the article isn't called "monetary income," but "income") it needs to be mentioned that income is more than just montary income and why montary income is so often used synonmous w/ the term income, whose definition is much broader.

The last reference by msnbc pertains only to a particular definition of income used in the business world and should be discarded. Regards, Signature^brendel 02:55, 20 March 2008 (UTC)

I did rephrase the intro, so people will first come across the definition they are most familiar with and then told the actual full "technical" definition of the term. I still beleive that it is imperative to mention the full, though perhaps technical, definition of income in the intro and not falsely label it as an alternative definition. As for the anti-tax sites, true, all income isn't taxable, only monetary income is (only that can be measured :). Happy Monday! Signature^brendel 03:14, 20 March 2008 (UTC)

I've reverted again. Not even our article Haig-Simons income states that it's generally accepted. Please bring that article up to snuff before inserting that into this article. — Arthur Rubin (talk) 17:34, 20 March 2008 (UTC)

(reset indent)It's not just Haig Simmons! (though I have textbook that acknowledges it to be the "classical definition" but regardless) That's just one definition. Income generally refers to accumulated consumption opportunity within a specified time frame (Haig-Simmons just tried to pin-down what consumption opprotunity excately can and cannot refer to) - that's common knowledge in economics and should be mentioned in the intro (mind you that it is sourced; thus veriable and true). I kept Haig-Simmons in its own section (though critisms of monetary income don't fall under the category of "other definitions"). In sum I re-worded the intro, w/o reinstering Haig-Simmons to feature the correct definition of the term.
I also had to edit the article since the current intro was completely false and misleading. Income is not the result of business transactions after expenses are substracted - that's net income and net-income only. Is gross-income (called revenue in the business world but simply income in common terms) not income? The msnbc reference is not sutiable for the intro, as it discusses "the difference between revenue and income," even though there is no difference so far as households and private individuals are concerns; the source is relevant only to to the term's usage in the business world. ONLY in the world of institutions there is net-income refered to as "income" and gross-income as "revenue."
It is completely unacceptable to mislead readers by confusing net-income with income through featuring a very specific technical definition, that is the exclusive domain of the business world, in the intro of an article on income in general.Signature^brendel 19:57, 20 March 2008 (UTC)

Please do not remove the MSNBC reference unless you can find a reliable source that it's wrong, not just misleading. For the moment, I'm not going to revert most of your lead, even though I think it the lead for an article other than Income, but I think an article RfC is in order. — Arthur Rubin (talk) 20:52, 20 March 2008 (UTC)

I have added the MSNBC ref in my re-write of the intro, but please understand that it refers to a specific usage of the term use under certain circumstances only. It does not provide a definition of income in general. As you can see the term income refer to different concepts depending on who is using it. I added a general econ textbook for a definition of private income (what the average joe/jane calls is familiar w/ as income). Now the intro provides a complete overview of what income may refer to, depending on who's talking. The one general statement, supported by Barr, that income always refers to consumption ability holds in any of these definitions, as is appropriate for an article dealing with "income" in general (this article isn't called "income (business)" or is it:) Regards, Signature^brendel 21:00, 20 March 2008 (UTC)

PS. An RfC is fine w/ me, but do give the link if you start one. Thx, Signature^brendel 21:02, 20 March 2008 (UTC)

Income inequality

There is nothing that violates NPOV in this section. Just about all reputable economists agree that some level of inequality is desirable while excessive inequality does harm. This part, which is all that is included in the article, is non-controversial and for that matter, quite banal. The controversy arises only when statements are made regarding the actual ramifications and extent of inequality in a given society, e.g. inequality in the UK is too high, top tax rates should be increased. The current section makes no such assertion, however, and is completely in tune w/ what is obvious to most any analyst. Signature^brendel 21:09, 20 March 2008 (UTC)

I've seen arguements made by reputable economists that any attempt to alleviate (perceived) income inequality causes more damage than that which may be caused by the inequality. David Friedman comes to mind, but I'd have to ask him if I'd remembered his words correctly, and to ask for a publised cite. — Arthur Rubin (talk) 21:38, 20 March 2008 (UTC)

Yes, such arguments have definitely been made (Van Hayek also comes to mind). But beleiving that redistribution makes matters worse does not mean one beleives that excessive inequality is harmless. When I edited the section I intentionally avoided any mention of whether or not redistribution is desirable (most American economist think so, but that's another matter better left to more specific articles). Not mentioning govt. intervention makes the section NPOV IMHO. Happy editing, Signature^brendel 23:39, 20 March 2008 (UTC)

It sounds like there is consensus for a NPOV status, so I'll remove the tag. --205.56.145.36 (talk) 13:31, 9 June 2008 (UTC)

Misleading term

The first sentence in this section includes the fallacy that income is distributed. I challenge the use of this word since it's misleading, and pernicious because it engages the emotions of people who are prone to envy.

Income is created-and, hence, earned by its creator.

I suggest we edit this sentence so that it cites a formal definition of income inequality, or at least, edit it so that it plainly state that levels of income are different. Sowellman03 (talk) 22:24, 8 February 2012 (UTC)

What do people do about low income?

I read this article to find out what people and businesses do about the difference between income and expenses. It didn't say. It simply ignored the fact that there is a big difference between income and bills received. I'm 49 and I don't know. I still need to live at home. Therefore, I would like this article to explain why the huge difference between wages and prices don't effect most people.--Chuck (talk) 19:28, 10 December 2008 (UTC)

EBITDA

I am not sure that the meaning of EBITDA in this context is quite right as the writer suggests that it excludes non-recurring items. It does exclude capital items and it is true that Buffett does not have as great a regard for the number as others might. My understanding, however, is that its because Buffett is more interested in cash flow than income and wants to know what the effects of capital expenditure are. His antagonism may be founded more on the importance others place on EBITDA than on the accuracy of EBITDA as a measure of income. Pkearney (talk) 18:36, 19 April 2009 (UTC)

US vs International

Whats the difference between US and international definitions of income? Is there is a difference? Pkearney (talk) 18:36, 19 April 2009 (UTC)

The definition of income is an economics term; there is no difference across borders. However, how income is defined or taxed in law varies widely. US citizens, for example, are taxed on world-wide income, regardless of where they live. Hong Kong residents, on the other hand, are taxed only on salary and other direct work compensation (e.g., bonuses, benefits) earned and paid in Hong Kong. DOR (HK) (talk) 07:30, 11 June 2009 (UTC)

Income in Philosophy and Ethics

I recommend deleting this section. First, it begins with a quote that is unrelated to the subject (income is the receipt of funds, not the "love of money"). Second, the remaining content is reference-free. DOR (HK) (talk) 07:30, 11 June 2009 (UTC)

Block quote

I returned the block quote to regular formatting, as it is not long enough. --Soulparadox 17:48, 20 June 2012 (UTC)