Saturday, December 11, 2010

A game theorist takes on Mankiw, Joe the Plumber, Obama, Buffett, Atlas Shrugged

Two very readable papers on tax fairness issues:

Professor Greg Mankiw (Harvard) wrote Spreading the wealth around: Essays inspired by Joe the Plumber. In short, Greg is on Joe's side. He thinks it's a bad idea to increase taxes on the rich, and that economic theory provides solid support for Joe's concept of fairness.

Professor Jonathan Weinstein, a mathematical game theorist at Northwestern, responds to Greg's arguments with Thoughts on Fair Taxation — Mankiw, Joe the Plumber, Obama, Buffett, Atlas Shrugged, Core Equivalence, and Shapley Value. Jonathan is on Warren Buffett's side, that fairness may indeed require the rich to pay more taxes than they currently pay.

If you are in my winter term tax policy class, read both papers, and keep them in mind as you learn about how our tax system actually works.

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