Taxing Height: Emmanuel Saez Responds to Mankiw

I emailed Emmanuel Saez this morning to see if he had a response to Greg Mankiw's paper on the optimal taxation of height. Saez has done a lot of work on tax progressivity (which I like) and optimal taxation (with which I am less familiar) and recently own the John Bates Clark medal for his contributions. He very kindly responded with the following:


Concerns for horizontal equity impose constraints on the optimal tax problem. The public would not accept a tax on height because it would seem unfair to tax more a taller person than a shorter person with exactly the same economic means. However, the public fully accepts that taxes should be based on income, which measures economic welfare or need closely, with the idea that it is less painful for a rich person than for a poor person to give up $1. Therefore studying the constrained utilitarian problem using a tax based solely on income and not based on extraneous characteristics such as height makes the most sense and can usefully inform the tax policy debate. That's what economists have done (including myself) since the famous contribution of James Mirrlees in 1971.

I'd recommend Greg develops a model explaining why people care about horizontal equity -- that'd be a useful contribution."
Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A Stop-Motion Tour of New York City

A filmmaker animated hundreds of still photographs to create this Big Apple flip book

Video

The Absurd Psychology of Restaurant Menus

Would people eat healthier if celery was called "cool celery?"

Video

This Japanese Inn Has Been Open for 1,300 Years

It's one of the oldest family businesses in the world.

Video

What Happens Inside a Dying Mind?

Science cannot fully explain near-death experiences.

More in Politics

Just In