Working Paper: NBER ID: w14976
Authors: 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.
Keywords: optimal taxation; height tax; utilitarianism; income redistribution
JEL Codes: H21; H23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| height (Y60) | income (E25) |
| height (Y60) | taxes (H29) |
| income (E25) | taxes (H29) |
| height (Y60) | productivity (O49) |
| height tax rejection (C52) | utilitarian model assumptions (D11) |