REAL INCOMES - Key Persons
A Price Performance Levy is paid by companies according to price performance
Adam Smith (1723-1790) did express the significance of refinement in technique and innovation depending upon the wit of the individual innovator. In Smith's time the only government revenue based on tax was the windows tax amounting to a range peaking at £50 per annum (in 2015 terms). William Pitt the Younger introduced income tax in 1798, after Smith's death, to support the Napoleonic War and this was equivalent, to a levy of 2% to 10 % according to income. Also the legal accountancy framework taken for granted today did not exist during Smith's time. It is therefore not surprising that the economist most in tune with the impact and importance of innovation would not have been aware of the possibility of the negative impacts of the profit paradox. This became a more significant issue with the growth in formal legally-based accountancy frameworks, corporate and personal taxation and other levies that significantly increased during the 20th Century peaking at around 45% of GDP in the last decade and now being around 40% of GDP. This has resulted in the impact of the profit paradox being of major significance.
Nicholas Kaldor 4 made important observations concerning Keynesianism and especially in relation to the theory of economic growth and the theory of distribution both of which find no effective reference within the Keynesian model. Early on Kaldor also developed a growth model which introduced technical progress as a key factor along with investment and savings.