The way I see it there are two debates going on here:
- Do we see it as fair to tax tall people/why not just tax income,
- Should we be using utilitarianism to figure this out.
Now Rauparaha covered off the first issue back in March last year here. Many people are saying “why target height when you can target income.
One answer is that you can’t change your height, but you can fiddle your income. A slightly better answer (although the other one is fine) is to note that there are two ways of getting income, luck and effort. Generally policy makers think it is good to redistribute luck but they also want to avoid penalising effort (that is why we talk about keeping effective marginal tax rates down). What height you get is the result of genetic luck at birth. Assuming that height conveys an advantage to earning income we can tax height directly, thereby redistributing and not influencing individuals incentives to work. This is the argument Rauparaha made. [Note: I am short but Rauparaha is tall 🙂 ].
Whether this is fair or not is a moral question to be sure. However, there is definitely an argument for taxing fixed variables related to income rather than taxing income itself.
Now we come to the claim that redistribution should not be based on utilitarianism.
I find this claim difficult to understand outside of the belief that, no matter what, people deserve a minimum living standard. However, even if we believe this we can surely frame it as a version of utilitarianism (members of society value that all its members have a certain living standard). If we can’t frame it as a version of utilitarianism then I am unwilling to believe it – as I find other moral frameworks lack sufficient transparency regarding trade-offs.
When discussing utilitarianism and the “height tax” Matt Yglesias says the argument Mankiw uses takes the form:
- The main arguments in favor of redistributive taxation are grounded in utilitarianism.
- Utilitarian theory supports taxing tall people more heavily than short people (this is the thesis of the paper).
- Therefore, people should either sign on for the height tax or else abandon their support for redistribution.
He calls the first premise false – I don’t agree as I think that when it comes to redistribution utilitarianism (combined with some underlying value judgments) is the primary justification for redistribution. Personally, I believe that the second premise is potentially false – as not every possible why of constructing a utilitarian model would support taxing tall people more. Fundamentally, there are moral judgments in the second premise which could be proven to be false. Given this, the conclusion does not follow from the appropriately defined premises – making the argument false (unless we also agree with some hidden value judgments).
As a result, I do think a focus on utilitarianism is appropriate. However, I think that maybe some of the important moral issues associated with the policy weren’t properly put out on the table – creating the belief that you HAVE to either support a height tax or give up on redistribution.