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

  • N. Gregory Mankiw
  • Matthew Weinzierl

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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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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  2. Narayana R. Kocherlakota, 2003. "Zero Expected Wealth Taxes: A Mirrlees Approach to Dynamic Optimal Taxation," Levine's Bibliography 666156000000000426, UCLA Department of Economics.
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  10. 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, vol. 65(258), pages 179-92, May.
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  12. J. A. Mirrlees, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Oxford University Press, vol. 38(2), pages 175-208.
  13. Anne Case & Christina Paxson, 2008. "Stature and Status: Height, Ability, and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 499-532, 06.
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  16. Kevin A. Hassett & R. Glenn Hubbard & Alan J. Auerbach & Robert J. Barro & N. Gregory Mankiw & Alan S. Blinder & Jon M. Bakija & Louis Kaplow & Edmund S. Phelps & John E. Roemer & Roger H. Gordon & Ma, 2001. "Inequality and Tax Policy," Books, American Enterprise Institute, number 53290, April.
  17. Tuomala, Matti, 1990. "Optimal Income Tax and Redistribution," OUP Catalogue, Oxford University Press, number 9780198286059, May.
  18. Victor R. Fuchs & Alan B. Krueger & James M. Poterba, 1998. "Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1387-1425, September.
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