Another Thing About Taxation

10 March 2008

What Place a Morality Tax?

Tax Day, New York City, by Amit GuptaWhen you start thinking about tax it’s hard to stop. Having written my weekend post on tax and governance in Hong Kong I began to think about the extent to which taxes are warranted beyond the fair maintenance of society and its institutions. In a place like Hong Kong taxation isn’t the main form of government revenue, so it’s hard to argue for more progressive tax rates. But what about as a general principle? How do we determine the scope of taxation that best suits a given society?

Daniel Hamermesh and Joel Slemrod have been working on one answer for a while: a tax on workaholism.

The pair recently published a paper entitled “The Economics of Workaholism: We Should Not Have Worked on this Paper” in the B.E. Journal of Economic Policy & Analysis. But the effort, provocative as it might seem, didn’t cause much of a stir. The paper had already been issued in 2005 as a NBER working paper, and even then made only a passing fuss (amongst others, the Ayn Rand fan club, the Atlas Society, was predictably unimpressed).

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