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Or maybe 4: That the conclusion is misguided. The effect of height on income is already taxed... by income taxes. This proposal would entail double-taxing th

by amalcon 17y ago

Or maybe 4: That the conclusion is misguided. The effect of height on income is already taxed... by income taxes. This proposal would entail double-taxing this effect. Surely we don't want an additional tax on (say) doctors simply because doctors are likely to earn more. The regular income tax handles that effect.

vomjom 17y ago
Wow, you completely missed the point. Obviously, the author knows that height is already taxed. The real point is that some members of society are more productive than others. Apparently, tall people are more productive than short people. What we want to make equal (from a utilitarian point of view) is income per unit effort. If you're from a disadvantaged background, but put as much effort as a person from an advantaged background, then you would make the same after-tax income. He's demonstrating that this point of view is impractical in reality.
- amalcon 17y ago
  He doesn't need to demonstrate the impracticality in that. Everyone already knows that measuring effort is impossible in practice. edit: His final claim -- that the tax on height is an explicit consequence of a utilitarian approach -- is simply flawed (or irrelevant, actually) because we do have a tax on height. A progressive income tax is meant to approximate what would happen if we accounted for all of these variables, but without actually accounting for each one explicitly, as that would be impractical. Now, I'm not saying that the utilitarian method is the end-all. If it is flawed (which I think it is), this is simply not the flaw.
- jjs 17y ago
  > Apparently, tall people are more productive than short people. Or, having (fallible!) humans doing the hiring has created certain inefficiencies in the labor market; inefficiencies which could be exploited/corrected by someone clever.
- msluyter 17y ago
  If you're from a disadvantaged background, but put as much effort as a person from an advantaged background, then you would make the same after-tax income. I think this misrepresents the notion behind progressive taxation. I'm no expert, but I understand it like this: because of declining marginal utility, the same % of income may mean much more to the poor than to the rich. If my yearly income is 10k, then 10% of it might mean the difference between making rent or not. If I make 100k, 10% of it may mean forgoing some luxury, but needn't substantively impact my overall quality of life. In that sense, the subjective impact of money is not fixed by its objective value; it's more important to those that have less of it. This is borne out by research. Money significantly impacts happiness until you make enough to basically get into the (lower) middle class, and then it has little impact. So, if you buy the above intuition and want to use taxation to help maximize happiness (utilitarianism), then you would want some form of progressive taxation in order to alleviate the negative impact of poverty. This doesn't mean "making everyone equal." To test our intuitions about this subject, I like philosopher John Rawls' conception of a "Veil of Ignorance." Rawls would ask: would you rather live in a society with, say, 1% billionaires and everyone else in poverty, or one more evenly distributed around a middle class -- without knowing in advance where you would end up in this society? The answer may well depend on one's level of risk tolerance, but I'd wager that most people wold opt for the latter.
  - nazgulnarsil 17y ago
    it is impossible to come up with a model that isn't arbitrary at some step. the lower middle class of today literally live like kings compared to a few hundred years ago, and in a another hundred years the "lower middle class" might very well live like multi-millionaires today. central planners can not be objective under any circumstances unless it is literally a god AI with perfect knowledge of determinism.
    - msluyter 17y ago
      That's why we have a democracy, where these "arbitrary" lines are ultimately drawn by votes, not central planning committees. Nobody is arguing for Soviet style totalitarianism.
- vannevar 17y ago
  "If you're from a disadvantaged background, but put as much effort as a person from an advantaged background, then you would make the same after-tax income." This is clearly untrue. If I have $2M US in the bank, it takes me no effort at all to earn $40K/year. This is part of the rationale behind a progressive tax, that money begets money with little effort, like a snowball rolling downhill. That's why only a fraction of the wealthiest 5% started life outside the top 15%. They love to tell the rags-to-riches story, but the riches-to-more-riches story is about 20 times more common.
dagheti 17y ago
Isn't the argument for taxing height not that it better captures the effects of someones advantages, but that because it is taxing something you cannot control, you are removing the disincentives created by taxing something that society may want more of (income). So while height taxing a more blunt instrument than income taxing, it doesn't distort people's choices in the same ways and avoids some of the deadweight losses. Unfortunately it probably will end up distorting people's choices in new and creative ways that we'd probably only find out about later.
cjlars 17y ago
Seems to me like he pretty much nailed the point. Certainly some legislative outcome could prevent double-taxation, but wouldn't it be more efficient to just let the market to take care of it?

by amalcon 17y ago

vomjom 17y ago

Wow, you completely missed the point. Obviously, the author knows that height is already taxed. The real point is that some members of society are more productive than others. Apparently, tall people are more productive than short people. What we want to make equal (from a utilitarian point of view) is income per unit effort. If you're from a disadvantaged background, but put as much effort as a person from an advantaged background, then you would make the same after-tax income. He's demonstrating that this point of view is impractical in reality.

amalcon 17y ago
He doesn't need to demonstrate the impracticality in that. Everyone already knows that measuring effort is impossible in practice. edit: His final claim -- that the tax on height is an explicit consequence of a utilitarian approach -- is simply flawed (or irrelevant, actually) because we do have a tax on height. A progressive income tax is meant to approximate what would happen if we accounted for all of these variables, but without actually accounting for each one explicitly, as that would be impractical. Now, I'm not saying that the utilitarian method is the end-all. If it is flawed (which I think it is), this is simply not the flaw.
jjs 17y ago
> Apparently, tall people are more productive than short people. Or, having (fallible!) humans doing the hiring has created certain inefficiencies in the labor market; inefficiencies which could be exploited/corrected by someone clever.
msluyter 17y ago
If you're from a disadvantaged background, but put as much effort as a person from an advantaged background, then you would make the same after-tax income. I think this misrepresents the notion behind progressive taxation. I'm no expert, but I understand it like this: because of declining marginal utility, the same % of income may mean much more to the poor than to the rich. If my yearly income is 10k, then 10% of it might mean the difference between making rent or not. If I make 100k, 10% of it may mean forgoing some luxury, but needn't substantively impact my overall quality of life. In that sense, the subjective impact of money is not fixed by its objective value; it's more important to those that have less of it. This is borne out by research. Money significantly impacts happiness until you make enough to basically get into the (lower) middle class, and then it has little impact. So, if you buy the above intuition and want to use taxation to help maximize happiness (utilitarianism), then you would want some form of progressive taxation in order to alleviate the negative impact of poverty. This doesn't mean "making everyone equal." To test our intuitions about this subject, I like philosopher John Rawls' conception of a "Veil of Ignorance." Rawls would ask: would you rather live in a society with, say, 1% billionaires and everyone else in poverty, or one more evenly distributed around a middle class -- without knowing in advance where you would end up in this society? The answer may well depend on one's level of risk tolerance, but I'd wager that most people wold opt for the latter.
- nazgulnarsil 17y ago
  it is impossible to come up with a model that isn't arbitrary at some step. the lower middle class of today literally live like kings compared to a few hundred years ago, and in a another hundred years the "lower middle class" might very well live like multi-millionaires today. central planners can not be objective under any circumstances unless it is literally a god AI with perfect knowledge of determinism.
  - msluyter 17y ago
    That's why we have a democracy, where these "arbitrary" lines are ultimately drawn by votes, not central planning committees. Nobody is arguing for Soviet style totalitarianism.
vannevar 17y ago
"If you're from a disadvantaged background, but put as much effort as a person from an advantaged background, then you would make the same after-tax income." This is clearly untrue. If I have $2M US in the bank, it takes me no effort at all to earn $40K/year. This is part of the rationale behind a progressive tax, that money begets money with little effort, like a snowball rolling downhill. That's why only a fraction of the wealthiest 5% started life outside the top 15%. They love to tell the rags-to-riches story, but the riches-to-more-riches story is about 20 times more common.

dagheti 17y ago

Isn't the argument for taxing height not that it better captures the effects of someones advantages, but that because it is taxing something you cannot control, you are removing the disincentives created by taxing something that society may want more of (income). So while height taxing a more blunt instrument than income taxing, it doesn't distort people's choices in the same ways and avoids some of the deadweight losses. Unfortunately it probably will end up distorting people's choices in new and creative ways that we'd probably only find out about later.

cjlars 17y ago

Seems to me like he pretty much nailed the point. Certainly some legislative outcome could prevent double-taxation, but wouldn't it be more efficient to just let the market to take care of it?