[Article] The Height Tax

Time Magazine

Harvard Professor Greg Mankiw, perhaps best known for his internationally best-selling undergraduate textbooks, has proposed a tax on height.

As well as selling hundreds of thousands of books, Mankiw also served as Chief Economic Adviser to the 2000-2004 Bush administration. In a new working paper with Matthew Weinzierl, The Optimal Taxation of Height: A Case Study
of Utilitarian Income Redistribution, Mankiw states results have shown that "each inch of height adds about two percent to a young man's income in the United States, on average."

The paper goes on to propose a model of taxation that "For example, a tall person with income of $50,000 pays about $4,500 more in taxes than a short person of the same income." The aim of the new tax is the improve the re-distribution of tax in accordance with utilitarian framework. And it would certainly do that.

I'd rather not play my cards on this issue until some responses are received. So, opinions? Is it an innovative method of taxation for the twenty-first century? Is it one of the most absurd suggestions you've heard all year?

As this is a policy issue that affects everyone, views from non-economists are particularly welcome on this one.

I think it's a

pisstake underlining the rubbish you can come up with when applying direct utilitarianism frame to real life questions and situations.

Time Magazine

Illegalheadbutt, I've edited your post until some responses on the merits of the tax are elicited.

Thomas_S_Hunterson

Might as well tax men more than women then

Ibid

Ibid wrote:

Illegalheadbutt, I've edited your post until some responses on the merits of the tax are elicited.

lol

To be honest it seems more suited for the Cukoos Nest...

Yet another example of 'sappy science' being paraded in public - however I do think that illegalbutthead may be on to something.. in that its a piss take.

My view:

I think that its going to end up being another article about the dangers of spurious regression

I've always wanted to use the spoiler tag!

Ger the man

Discrimination me thinks! I bet the professor is about 4'0" tall? lol!

fobster

Sean_K wrote:

Might as well tax men more than women then

That's what I thought at first as well. It is a far more common occurence.

Seeing as height is largely down to your genes, making someone pay more tax due to it are ridiculous.

And besides Bono pays very little tax as it is.

Time Magazine

Deleted User wrote:

lol

Tell me about it . It kinda kills the debate if everyone reads what you see.

Interestingly, the professor is 6' 2".

Those who are against this plan: why? If we tax income at a higher rate to re-distribute it, why not tax something which leads to higher income?

Zaraba, it's not a spurious regression. Everyone can understand how something like being in a wheelchair could systematically affect someone's self-belief; some psychologist have found some evidence to suggest that height improves self-belief (e.g. in adolescence) and thus potential earning power.

Can anyone offer a reason, assuming they're not against standard income re-distribution, why it is unfair? It's not directly discrimination as far as I can see; although men tend to be taller they also tend to earn more, too.

I would say that it spurious as the tax system is designed to redistribute income from high earners to low earners - so why would you base it on a exogenous variable?

Furthermore;

If you follow this you then have to introduce seperate tax systems for male and female as there is a substantial height difference.

You would also have to introduce different ethnic systems as there is also quite a pronounced difference of height between various races.

How about disabled people then? Do you count a person in a wheelchairs height as his actual height (even though he can't utilise it) or the height at which he works normally (which is dependant on the wheelchair - a variable)

What then happens to people who have elective height surgery? Do you tax them at their natural rate or their artificially induced one?

In one move you have set back all progress in national integration and have created a compelling incentive for people to revert to racist and discriminatory tendancies.

Come on, this is a piss take and yet another example of sappiness in social science.

Post this in AH - and see what response you get, could be quite interesting!

racist imo

europerson

I look down on those of you who support this madcap idea.

Time Magazine

Deleted User wrote:

so why would you base it on a exogenous variable?

The point is that it's not an exogenous variable. Studies suggest not just a correlation, but a causal relationship via things such as self-esteem.

I've read the paper. It was quite dull and tediously mathematical, as is standard for people regularly published in the AER. In Ireland, widowers receive increased tax credits (that's Tax-Free Allowance for those of us that did 6th Class Maths pre-Charlie McCreevey's re-shuffling) on account of their status. This seems reasonable to most people. Purely based on the marginal utilitarian approach to income redistribution logic, this should seem reasonable to everyone. It's not a spurious regression and it taxes people that gives them an advantage. Much like widowers are taxes lesser amounts as it's assumed (shown?) that widowers are at a disadvantage in terms of sudden financial losses etc.

However, the issue arises that everybody knows this plan is entirely nonsensical. Yet it fits in entirely with the Edgeworthian-esque view of the world. And so Mankiw, whose views on re-distribution may be revealed by his political party membership that I intentionally mentioned, publishes a paper which is essentially saying "Well by your logic, utilitarians, you reach this conclusion." So illegalheadbutt had it spot on; it's a piss-take. I just wanted to get everyone to say it's stupid before we face the real question the paper poses.

If the theory of marginal utility re-distribution allows for such a ridiculous conclusion, shouldn't that theory be seriously re-considered?

As Mankiw put it himself:

Mankiw, Weinzierl (2007:2-3) wrote:

Many readers will find the idea of a height tax absurd, whereas some will find it merely highly unconventional. The purpose of this paper is to ask why the idea of taxing height elicits such a response even though it follows ineluctably from a well-documented empirical regularity and the dominant modern approach to optimal income taxation. If the policy is viewed as absurd, defenders of this approach are bound to offer an explanation that leaves their approach intact; otherwise economists ought to reconsider this standard approach to policy design.

Any fellow re-distributionists got an answer? The best I can muster is something analogous to collateral damage. Oftentimes policy is dictated not just by optimal strategies but by constrained optimisation. If we accept sometimes ideal policies cannot be pursued, perhaps we can accept that next-best (but with some silly conclusions) compromises can function well.

I do not, however, have anything on a theoretical level to combat this.

I still find the whole thing ludicrous and quite annoying (plus I've had a string of bad days at work which is not helping!)

My income is NOT dictated by my height - if you think it is, then you are returning to the time of predestination.

I will concede that in some cases, height may be a factor, but only one of many which could influence income in some cases.

Do you tax the amount that was spent on your education? That would have a much stronger influence on income potential.

How about basing a tax on your grades in college / School? All people with 1.1 / 2.1 must pay the higher tax rate..

Such factors are, in reality, impossible to aggregate to cover the whole population as while there may be readily identifiable factors (education, location, parents IQ [see Freakonomics for a light read on the subject]), these cannot in any real sense, be expected to homogenously apply to everyone. This is further complicated by the introduction of different races (see Zaraba, post #10)*.

The only practical and equitable method of taxation is then to tax the product of the factors (income) and not the factors themselves.

Come on Ibid - get with the macro perspective here!


*You can't accuse me of not having a sense of humour!

Edit: Spellings

Mankiw has a Facebook account - someone send him a message and ask him!