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

Listed author(s):
  • 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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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.1.155
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File URL: http://www.aeaweb.org/aej/pol/data/2008-0107_data.zip
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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: 155-176

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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
Contact details of provider: Web page: https://www.aeaweb.org/aej-policy
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  1. Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
  2. Kanbur, R. & Keen, M. & Tuomala, M., 1990. "Optimal Non-Linear Income Taxation for the Alleviation of Income Poverty," The Warwick Economics Research Paper Series (TWERPS) 368, University of Warwick, Department of Economics.
  3. Loukas Karabarbounis & Andrea Ichino & Alberto Alesina, 2008. "Gender based Taxation," 2008 Meeting Papers 500, Society for Economic Dynamics.
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  9. 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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  15. 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.
  16. 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.
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  18. Alan J. Auerbach & Kevin A. Hassett, 1999. "A New Measure of Horizontal Equity," NBER Working Papers 7035, National Bureau of Economic Research, Inc.
  19. 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, Winter.
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