greg mankiw presents a compelling argument for a tax on height (young men make on average 2% more income per inch of height):
The problem addressed in this paper is a classic one: the optimal redistribution of income. A utilitarian social planner would like to transfer resources from high-ability individuals to low-ability individuals, but he is constrained by the fact that he cannot directly observe ability. In conventional analysis, the plan- ner observes only income, which depends on ability and effort, and is deterred from the fully egalitarian outcome because taxing income discourages effort. If the plannerÃ¢â‚¬â„¢s problem is made more realistic by allowing him to observe other variables correlated with ability, such as height, he should use those other vari- ables in addition to income for setting optimal policy. Our calculations show that a utilitarian social planner should levy a sizeable tax on height. A tall per- son making $75,000 should pay about $4,500 more in taxes than a short person making the same income.
Height is, of course, only one of many possible personal characteristics that are correlated with a personÃ¢â‚¬â„¢s opportunities to produce income. In this paper, we have avoided these other variables, such as race and gender, because they are intertwined with a long history of discrimination. In light of this history, any discussion of using these variables in tax policy would raise various political and philosophical issues that go beyond the scope of this paper. But if a height tax is deemed acceptable, tax analysts should entertain the possibility of using other such Ã¢â‚¬Å“tagsÃ¢â‚¬Â as well.
Many readers, however, will not so quickly embrace the idea of levying higher taxes on tall taxpayers. Indeed, when first hearing the proposal, most people recoil from it or are amused by it. And that reaction is precisely what makes the policy so intriguing. A tax on height follows inexorably from a well-established empirical regularity and the standard approach to the optimal design of tax policy. If the conclusion is rejected, the assumptions must be reconsidered.
he goes on to conclude that you must either support a tax on height, or reject the conventional approach to taxation.