g y - r g y + r n x = n y - n r y + n r x
g y - r g y = n y - n r y
g (1 - r) y = n (1 - r) y
g = n
Q.E.D.
Development of the Tax Void
These formulas call for a graphical illustration. We only need data on rwi, r and h for a stylized display. We will take r = h = 50%. Then we need data on rwi, and we can use our example of Holland.
Graphical presentation of the Dutch data
Appendix Table 20 gives the required data on the Dutch economy. Dutch 1951 exemption can be taken as 1951 subsistence. Before we use the data for the formula, let us first see what they mean. Figure 11 and Figure 12 on inflation P and real income growth rwi = wi / P show that the data fit above classification of subperiods for inflation and real income growth behaviour.