Discussion about this post

User's avatar
Robin Hanson's avatar

I'll bet if I made a post mentioning the word "abortion", no matter how indirectly, we'd get a long discussion with all the usual arguments about abortion. But since I mentioned the word "tax" here we get all the usual arguments about taxes. The main point of this point is that economists don't embrace "silly" results of economic theory. The fact that standard theory supports the tall tax is not in dispute.

Expand full comment
Overcoming Bias Commenter's avatar

"we tax income based on an idea of justice [...] we do not need to incentivise being short"

At least one possible justification (and one typically used in optimal taxation theory) for progressive income tax and redistribution in general is utilitarian. Our intuition says that $1 means more to a poor than a rich person so transferring $1 from the rich to the poor is a gain for society. This, however, needs to be balanced against deadweight loss caused by incentive effects.

This combination is what makes height tax optimal with utilitarian ethics. Height is sort of being used as a proxy for income. Height correlates with income but doesn't respond to incentives so basing taxation partly on it allows for a net utility gain when balancing the utility gain of redistribution against the utility loss from incentive effects.

Expand full comment
95 more comments...

No posts