Jane Galt has a tax plan.
Sneaking Suspicions has a tax plan.
William Burton has a tax plan.
As Durante used to say, “Ev-ery-buddy wants ta get inta de act.”
Burton in particular concentrates on minimizing the deadweight loss from taxation due to the cost of collection, the cost of compliance for taxpayers, and (most important) the distortionary effects of tax avoidance. Estimates of deadweight loss, the last time I looked, ran about 30%: i.e., a net dollar to be spent on public programs reduces effective private consumption or investment by $1.30. (Practitioners of benefit-cost analysis, please note.)
But there’s another side to this picture. Sometimes private decision-making, uninfluenced by taxation, is “distorted,” compared to some ideal. External costs (including pollution and congestion) and self-destructive consumption (including addiction and its analogues) are the important cases. When that is true, targeted taxes, such as effluent charges, can bring actual behavior closer to the microeconomic optimum, rather than forcing it away from an optimum.
So to the maximum extent possible, we should support the government with taxes on pollution, congestion, and addiction: sulfur taxes, carbon taxes, particulate taxes, spectrum fees, charges for being on crowded superhighways at crowded times of the day, a gross-vehicle-weight fee to recapture the damage heavy vehicles do to highways (something like the square of the weight per axle) and the danger they pose to other vehicles, alcohol taxes, and taxes on the sorts of food that are creating the obesity epidemic.
Gambling taxes are complicated: arguably too high on the state lotteries (around 50%) and not high enough at the casinos, and the lottery experience provides an important warning about what happens when governments decide to promote the bads they’re taxing.
[Petroleum is a special case: heavy petroleum taxation would tend to reduce world oil prices, transferring purchasing power from oil exporters to oil importers, and incidentally making less money available to sponsor al-Qaeda.]
Yes, there are lots of complexities, including distributional issues and the inevitable transition problems, but the principle is so obvious it’s hard to imagine why it’s not more often recited, at least as a principle: it’s better to tax things we want less of rather than things we want more of (such as working, saving, or building houses). And taxation often, though not always, outperforms regulation as a way to change private behavior.