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The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution

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  • N. Gregory Mankiw
  • Matthew Weinzierl

Abstract

Should the income tax include a credit for short taxpayers and a surcharge for tall ones? The standard utilitarian framework for tax analysis answers this question in the affirmative. Moreover, a plausible parameterization using data on height and wages implies a substantial height tax: a tall person earning $50,000 should pay $4,500 more in tax than a short person. One interpretation is that personal attributes correlated with wages should be considered more widely for determining taxes. Alternatively, if policies such as a height tax are rejected, then the standard utilitarian framework must fail to capture intuitive notions of distributive justice. (JEL D64, H21, H23, H24, J11)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 2 (2010)
Issue (Month): 1 (February)
Pages: 155-76

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Handle: RePEc:aea:aejpol:v:2:y:2010:i:1:p:155-76

Note: DOI: 10.1257/pol.2.1.155
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  1. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Optimal non-linear income taxation for the alleviation of income-poverty," European Economic Review, Elsevier, vol. 38(8), pages 1613-1632, October.
  2. Saez, Emmanuel, 2001. "Using Elasticities to Derive Optimal Income Tax Rates," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 68(1), pages 205-29, January.
  3. Immonen, Ritva, et al, 1998. "Tagging and Taxing: The Optimal Use of Categorical and Income Information in Designing Tax/Transfer Schemes," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 65(258), pages 179-92, May.
  4. Tuomala, Matti, 1990. "Optimal Income Tax and Redistribution," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198286059, October.
  5. Alesina, Alberto & Ichino, Andrea & Karabarbounis, Loukas, 2007. "Gender Based Taxation and the Division of Family Chores," IZA Discussion Papers 3233, Institute for the Study of Labor (IZA).
  6. Nicola Persico & Andrew Postlewaite & Dan Silverman, 2004. "The Effect of Adolescent Experience on Labor Market Outcomes: The Case of Height," NBER Working Papers 10522, National Bureau of Economic Research, Inc.
  7. Narayana Kocherlakota, 2004. "Zero Expected Wealth Taxes: A Mirrlees Approach to Dynamic Optimal Taxation," Levine's Bibliography 122247000000000729, UCLA Department of Economics.
  8. Anne Case & Christina Paxson, 2006. "Stature and status: Height, ability, and labor market outcomes," Working Papers 232, Princeton University, Department of Economics, Industrial Relations Section..
  9. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 38(114), pages 175-208, April.
  10. Albanesi, Stefania & Sleet, Christopher, 2003. "Dynamic Optimal Taxation with Private Information," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4006, C.E.P.R. Discussion Papers.
  11. Viard, Alan D, 2001. " Optimal Categorical Transfer Payments: The Welfare Economics of Limited Lump-Sum Redistribution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(4), pages 483-500.
  12. Alan D. Viard, 2001. "Some Results on the Comparative Statics of Optimal Categorical Transfer Payments," Public Finance Review, , vol. 29(2), pages 148-180, March.
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  1. Does being short make you more likely to be a criminal?
    by Adam Ozimek in Modeled Behavior on 2010-05-03 11:39:11
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