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

27 Pages Posted: 11 Jun 2009

See all articles by N. Gregory Mankiw

N. Gregory Mankiw

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Matthew Weinzierl

Harvard Business School - Business, Government and the International Economy Unit

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Date Written: June 11, 2009

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.

Suggested Citation

Mankiw, N. Gregory and Weinzierl, Matthew, The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution (June 11, 2009). Harvard Business School BGIE Unit Working Paper No. 09-139. Available at SSRN: https://ssrn.com/abstract=1418042 or http://dx.doi.org/10.2139/ssrn.1418042

N. Gregory Mankiw

Harvard University - Department of Economics ( email )

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Matthew Weinzierl (Contact Author)

Harvard Business School - Business, Government and the International Economy Unit ( email )

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