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What’ll It Be?

In Bob Frank’s Luxury Fever, he makes the case for a progressive consumption tax on the grounds that we spend lots of our income on goods that do not make us intrinsically happier. These so called positional goods are things like fast cars, fancy barbecues, etc. whose source of value (he argues) comes from the fact that they are bigger, faster or nicer than what everyone else has. A steep consumption tax would persuade folks to purchase less of these things and turn their attention to consuming more goods that provide true happiness – like vacations and time with family (I’d like to see that family!).

Suppose you buy it. How, then, would you react to the following finding:

… Women care more about relative income and consumption than men do …

If women care more about status and positional goods, and you take Frank’s proscription seriously, then it suggests that women ought to be taxed more than men, at least their consumption goods. And while not wholly analogous, one might therefore support the idea of gender differences in wages (women still earn less than men, although not so for single women with no children) on the grounds that lower income prevents women from consuming too many status goods. Who wants to go there? Will any Nudger proudly support more serious consumption taxes on women? If not, then why not and why should we take the luxury tax idea seriously? Just askin’, that’s all.

One Response to “What’ll It Be?”

  1. Speedmaster says:

    >> “In Bob Frank‚Äôs Luxury Fever, he makes the case for a progressive consumption tax on the grounds that we spend lots of our income on goods that do not make us intrinsically happier.”

    Pardon me here, but … who the **** is Bob Frank to tell me what makes me happier?!

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