Unbiased Analysis of Today's Healthcare Issues

Increase the income tax on men only?

Written By: Jason Shafrin - Feb• 13•08

According to optimal tax theory, taxes should be highest on relatively inelastic activities.  For instance, most men work full-time and and the tax rate does not affect this.  On the other hand, it has been should that the labor supply of women is much more sensitive to wages and income tax rates.  If we follow the conclusions from the optimal taxation literature we should tax men more than women.

This is what Harvard economists Alberto Alesina and Andrea Ichino propose (see Vox EU).  The Free exchange blog as well as Gilles Saint-Paul of the Toulouse School of Economics, however, are more sensible and reject this proposition.  Free exchange concludes on a particularly interesting point:

…The economist’s idealised utilitarian social planner does not take seriously the costs incurred by the conflicts that will flare up when some are made ‘more equal than others’.  Perhaps liberal constitutions prominently feature equality before the law for a good reason: official non-discrimination works as a truce, a way of keeping the social peace.

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