The Answer Is Transaction Costs

Motives and Morals of Taxes, and an Homage to Bob Barker


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There are three reasons to impose taxes, it seems:
1. To discourage behavior "we" don't like
2. To raise revenue for things "we" want 
3.  To achieve a pattern of social justice in the distribution of resources
What does transaction cost analysis have to tell us about all this?
And Bob Barker, and the 99 cent price point.
Have you even read Marx?
And a new letter.
NOTE: This is the last of the regular episodes of Season 1. With the start of the new academic year, TAITC will move to once per month, with longer episodes coming out the last Tuesday of each month. 
APOLOGY: I said "Meltzer and Richards" with an "S", twice. That's wrong. It's just "Richard," no "S."


Links to Resources:

  • Quote Investigator on the ditty about "Tax that man"
  • Meltzer, A. H., & Richard, S. F. (1981). A Rational Theory of the Size of Government. Journal of Political Economy, 89(5), 914–927. 
  • Costs of tax compliance in the U.S.
  • Chilean tax system 
  • Laffer Curve
  • Charlie Gibson/Barack Obama exchange
  • Who Pays Federal Income Tax
  • Harvard Business Review article on $X.99 pricing
  • On the Problem of "Fictitious Reference Pricing"
  • Bob Barker Obit
If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !


You can follow Mike Munger on Twitter at @mungowitz


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