Chapter

Taxation and Well‐being

Bernard Van Praag

in Happiness Quantified

Published in print December 2007 | ISBN: 9780199226146
Published online May 2008 | e-ISBN: 9780191718595 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199226146.003.0012
Taxation and Well‐being

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This chapter examines the feasibility of a lump-sum tax based on ‘ability’, defined as a function of IQ and education. Empirical research on a Dutch database shows that shifting from income-based to ability-based taxation would not have devastating effects on net income positions. These relatively small effects are attributed to the prevailing equitable tax rates in the Netherlands, and the limitation of the study to full-time employees.

Keywords: lump-sum tax; ability; IQ; education; income tax; tax rates; Netherlands

Chapter.  10909 words. 

Subjects: Economics

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