This fall, college seniors across the U.S. are making a choice that will shape the rest of their lives: which career to pursue after graduation. It’s a breathtakingly complex decision, involving trade-offs among prestige, job security, quality of work life, and compensation.
What If Socially Useful Jobs Were Taxed Less Than Other Jobs?
Profession-specific taxes could grow the economy dramatically.
October 11, 2017
Summary.
Economic research increasingly indicates that some professions have “spillovers,” meaning the social value of an individual’s work can be much higher, or much lower, than that individual’s compensation. The job market does not account for all social value. Spillovers jam the signals in the economy, misdirecting talented students. What if, for instance, teachers faced a different tax rates than lawyers? Although some sectors do receive subsidies, the notion of widespread profession-specific taxation represents a much more radical departure than reformed income tax rates. A recent paper examines this question, and estimates that imposing profession-specific taxes could grow the economy dramatically.