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We’ve run several pieces over the years highlighting the inconsistencies among the “Nudge” crowd. I probably unfairly bundle the “libertarian” paternalists with the more hard-core unapologetic paternalists, but these are matters of degree, not kind. The reason for my consternation is that I rarely (never in fact) see a consistent position among these behavioralists to support things that would obviously improve people’s well being. The positions being supported seem to me to be justifications for an expansion of bureaucratic power, as well as their own prestige and influence either socially or within government. Fine by me, just don’t dress it up as anything other than that.

Here is my latest ponderance: how many of you can state, within a +/- of $500, how much income you earned last year? I would bet that 80% of Americans could do that. I might be one of the folks outside of it, but I can tell you clearly what my salary is down to the penny, and ballpark some other compensation I may be receiving.

OK, how many of you can state, within a +/- of $500, how much you paid in taxes last year? Heck, that’s an impossible question, how many of you could answer that question if I only asked about one type of tax? Do you know how much you paid in sales taxes? How about via excise taxes embedded in goods’ prices? What about property taxes (that’s one of the easier ones, we get a pretty clear bill every quarter)? Anyone know how much they paid in payroll taxes (or how much your employer “paid” on your behalf? What about your income taxes? With some considerable effort I think I could ballpark these, but try it out – go around and ask folks these two questions and let me know if they can answer.

Now, whatever your views are about the appropriate size of government or the scope of its activities, can anyone reasonably argue that taxpayers should be mystified about how much, exactly, they are paying in taxes to the various authorities? I can find no single moral, economic, or other justification for it. And I would argue that our well-being would be improved if we were as aware of these particulars as we are about our paychecks. So I expect to see, very soon, the “Nudgers” come out to support more transparency in government, and perhaps even a consolidation in taxes so that people know better what things cost, and just how much they are “contributing” to the social stew of public goodness.

But you know what you’ll get. That’s right, these guys.

2 Responses to “Where Are the Behavioral Economists?”

  1. Mike says:

    I’m stealing your crickets.

  2. Harry says:

    Great question, wintercow. I would have to go to my calculator and my bank statements, then have to figure my gas taxes and other excise taxes, go to my real estate tax receipts, county, municipal and the big one that comes up less than two weeks from now. Then there are the hotel taxes, the airline excise taxes, and the taxes for your telephone bill, the taxes for Internet access. Tax the mice, tax thei lice, etc. The local earned income tax, and the payoff, the occupational privilege tax. Tax ’em looking through the window twice.

    There is a bridge near my house that has been demolished for reconstruction. I drove by it today, at eleven o’clock. There were three pickups, two dump trucks, a backhoe, a bulldozer, and four men. Everything was idle.

    These were contractors, and I might assume that the stupid person running the job did not get the stuff to the job on time, and therefore everybody was taking their pre-lunch break before taking their lunch break.

    But these guys get paid prevailing wage, because it is a bridge, and the contractor built into his bid the full cost of the backhoe and the trucks.

    Krugman would call this progress, spending a million or so on a simple bridge over a small creek. He would highlight the fact that a private company was wasting money, paying good wages to idle workers watching a million dollars of idle equipment.

    This is a shovel-ready project in action. The shovels are in the back of the pickups.

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