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Stop taxing happiness : a new perspective on progressive taxation

journal contribution
posted on 2005-01-01, 00:00 authored by Mirko Bagaric, J McConvill
The development of taxation law and policy has been driven largely by economic considerations and economic theory. Underlying this is the assumption that money is important to human well-being and is in fact the most important thing in this regard. Recent empirical studies of human well-being disprove this assumption. Money has only a limited bearing on happiness. It follows that economic arguments that have long shaped taxation law and policy should be discarded in preference for recent learning concerning what really matters to people. The results of the recent studies have significant implications for the manner in which we should raise tax. We argue that for income under approximately $20,000 the rate should be 0 to 5 per cent. For income between $20,000 to $50,000 the rate should be about 15 per cent. Incomes beyond this level should taxed at approximately 75 per cent. There is no reason to have further rate differentials.

History

Journal

Pittsburgh tax review

Volume

2

Issue

2

Season

Spring

Pagination

65 - 91

Publisher

University of Pittsburgh School of Law

Location

Pittsburgh, PA

ISSN

1932-1821

Language

eng

Publication classification

C2 Other contribution to refereed journal

Copyright notice

2005, HeinOnline

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