
Do you really want to tax ability? - anamax
http://www.voxeu.org/index.php?q=node/3651
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iron_ball
Disingenuous at best. Tax incentives around mortages, charitable
contributions, and child health insurance are social signals: legislation
saying 'this is what we value as a society, these are the things we want to
help you with.' If you disagree with that kind of legislation, argue against
it directly. This business about height determining earning potential is
utterly irrelevant to your _real_ complaints.

And the math is foolish to begin with: if height determines income level, and
you really want to try to equalize for that factor, you should be applying
credits/penalties to bring people of different height to the same level -- not
taking people who are already at the same level and elevating the short one
above the tall one. After all, if they make the same income despite their
height difference, it stands to reason that the shorter person is more
productive. Applying a credit/penalty when incomes are already equal is the
wrong way to argue the (already misguided) point.

~~~
pmorici
The difference between height and those other things the government determines
taxes on is that height is not a choice, it's an innate characteristic of a
person. People find taxing on height repulsive because it is more or less
equivalent to taxing on race which everyone would immediately see as wrong and
would be prohibited by the constitution.

In order for this guys argument to hold water he should have used a case other
than height which involved a component of personal choice and invoked the same
feeling of injustice in people.

~~~
huangm
Can you please provide an argument for why _choice_ ought to be the principal
factor for some attribute to be taxable? The justification is in no way clear
to me.

~~~
iron_ball
Would you agree that taxes should be just? If so, would you agree that it is
unjust to tax someone for something he has no choice in?

~~~
anamax
> If so, would you agree that it is unjust to tax someone for something he has
> no choice in?

Hmm. No one chooses their parents. Should rich kids be taxed like poor kids?

> Would you agree that taxes should be just?

I'll agree that "just" has no agreed-on definition and is used as a way to
imply that the other person is bad. As such, I find it a useful signalling
device in a discussion.

~~~
iron_ball
Nobody wins arguments on the internet, so let's agree to be unable to agree on
the definitions of terms about which to disagree.

~~~
anamax
People win arguments on the web all the time. What's rare (and different) is
at argument that persuades some of the participants.

Are you certain that you don't want to argue that "just", the word on which
your argument and position depends, actually has a useful and good meaning?

------
amalcon
Or maybe 4: That the conclusion is misguided. The effect of height on income
is already taxed... by income taxes. This proposal would entail double-taxing
this effect. Surely we don't want an additional tax on (say) doctors simply
because doctors are likely to earn more. The regular income tax handles that
effect.

~~~
vomjom
Wow, you completely missed the point. Obviously, the author knows that height
is already taxed.

The real point is that some members of society are more productive than
others. Apparently, tall people are more productive than short people. What we
want to make equal (from a utilitarian point of view) is income per unit
effort. If you're from a disadvantaged background, but put as much effort as a
person from an advantaged background, then you would make the same after-tax
income.

He's demonstrating that this point of view is impractical in reality.

~~~
msluyter
_If you're from a disadvantaged background, but put as much effort as a person
from an advantaged background, then you would make the same after-tax income._

I think this misrepresents the notion behind progressive taxation. I'm no
expert, but I understand it like this: because of declining marginal utility,
the same % of income may mean much more to the poor than to the rich. If my
yearly income is 10k, then 10% of it might mean the difference between making
rent or not. If I make 100k, 10% of it may mean forgoing some luxury, but
needn't substantively impact my overall quality of life.

In that sense, the subjective impact of money is not fixed by its objective
value; it's more important to those that have less of it. This is borne out by
research. Money significantly impacts happiness until you make enough to
basically get into the (lower) middle class, and then it has little impact.

So, if you buy the above intuition and want to use taxation to help maximize
happiness (utilitarianism), then you would want some form of progressive
taxation in order to alleviate the negative impact of poverty. This doesn't
mean "making everyone equal."

To test our intuitions about this subject, I like philosopher John Rawls'
conception of a "Veil of Ignorance." Rawls would ask: would you rather live in
a society with, say, 1% billionaires and everyone else in poverty, or one more
evenly distributed around a middle class -- _without knowing in advance where
you would end up in this society_? The answer may well depend on one's level
of risk tolerance, but I'd wager that most people wold opt for the latter.

~~~
nazgulnarsil
it is impossible to come up with a model that isn't arbitrary at some step.
the lower middle class of today literally live like kings compared to a few
hundred years ago, and in a another hundred years the "lower middle class"
might very well live like multi-millionaires today.

central planners can not be objective under any circumstances unless it is
literally a god AI with perfect knowledge of determinism.

~~~
msluyter
That's why we have a democracy, where these "arbitrary" lines are ultimately
drawn by votes, not central planning committees. Nobody is arguing for Soviet
style totalitarianism.

~~~
sp332
Assuming you mean in the USA, we don't have a democracy it's a republic, which
means we definitely do have central planning committees, but they are
appointed by politicians who are voted into office by the people. It's not
quite "Soviet totalitarianism", but it's several steps removed from voters.

------
ewanmcteagle
It's meant to be a criticism of the utilitarian view of taxation. Read this:
<http://www.overcomingbias.com/2009/06/defending-mankiw.html>

It's not logically inconsistent

------
gojomo
A similar analysis might be applied along the dimension of age, following the
recent observations, in several places, that despite (for example) Warren
Buffett's riches, few 20-year-olds would want to switch places with him. 60
years of life is worth more than $60 billion dollars, to most people, so every
20-year-old is in some sense "richer" than Buffett.

So should strict egalitarians tax the young more than the old? (Don't worry,
it'll even out over a lifetime!)

------
astrodust
This is a pretty weak argument to be making. There's no specific reason to
provide for a transfer of wealth from tall people to short people, it doesn't
provide any specific social benefit.

At best this is some kind of amateurish Libertarian raving, or a thinly veiled
troll.

~~~
duncanj
And this troll wrote a popular economics textbook.

~~~
davidw
Mankiw's a smart guy, but he's also very much a Republican:

<http://en.wikipedia.org/wiki/N._Gregory_Mankiw>

He served under Bush, and as an advisor to Romney. I'm not saying there's
something wrong with Republicans, just that at times he tends to be a bit of a
"party man".

Lately, his writing has taken a turn that's more along the lines of "sniping
at Obama and company", rather than writing anything particularly
interesting... sort of like Krugman with Bush.

Anyway, all very much off topic...

