Saturday, October 30, 2010

A different kind of tax

Via Brad Delong Here is a brief video clip from an archived newsreel showing the dramatic moments as Secretary of War Stimson drew the first draft number out of a random bowl. Everyone could see the fairness of the process as the numbers were thoroughly mixed up in the bowl, stirred around, and the Secretary was blindfolded before he reached into the bin.

As I've mentioned in class, governments do not collect all taxes in cash. Some taxes are paid "in kind." Here is a link to a paper by University of Chicago economist Casey Mulligan: Taxation in Kind.

The classic example on an kind-tax is military conscription, familiarly known as "the draft." The use of the draft reduced the apparent monetary budget cost of both World Wars, the Korean War, and the Viet Nam War. The specter of the draft overhung the lives of the young men in the cohort that came of age in my cohort.

Young men must still register with the Selective Service, even though the US military has relied entirely on volunteers since the mid 1970s. Many other countries still require military service. Professor Mulligan's paper cites a statistic from a study done in the mid 1990s that 59% of the world's countries still used conscription.

Congressman Charles Rangel, former Chair of the House Ways and Means Committee, has repeatedly called for reinstating our country's use of the draft.

1 comment:

  1. Wow!

    Very eye opening!

    I have a new perspective on Taxation in Kind.

    Thank You very much for sharing!