“I understand your causal mechanism to be as follows: (1) taxation reduces people’s income, (2) having less income makes working risky jobs financially more attractive, (3) this causes more people to die.”
No, the mechanism is: (1) taxation takes money from people, (2) people have less money to spend on their own well-being, and (3) this causes death. For example, someone with a take-home pay after taxes of 40k euros will, compared to someone with 60k euros, eat fewer fresh organic vegetables.
“I don’t think people taking riskier jobs, as the VSL approach would assume, is the primary negative impact of taxation. Rather, I think reducing people’s spendable income makes them less likely to buy healthy food, less likely to live in air-conditioned or heated houses, and less likely to be able to afford medical bills.”
This was my point. We need to research how many people these effects kill. But I am forced to use the inaccurate and improper VSL in my cost-benefit analysis because we have no better number.
“I can imagine that taxing people to the point that they enter poverty (as you suggested) makes things a lot worse for them. Most countries have some type of tax-free threshold under which you don’t have to pay income taxes. Low incomes are only taxed relatively little.”
We agree that taxing poor people has a high mortality cost. But there is also a mortality difference between a middle-class lifestyle and an upper-middle-class lifestyle. Much of the tax burden in developed countries falls on the middle class, and they do suffer meaningfully from those taxes.
“I expect the sign on most taxes to be negative (i.e. reducing mortality), at least when the tax incidence is not on people in poverty and public funds are spent on sensible projects. ”
Please see the clarification I added at the beginning of the post. The tax itself will always kill a nonzero number of people; the value of the spending after taxes are raised, and whether it outweighs the cost of the tax, is a different issue.
“I understand your causal mechanism to be as follows: (1) taxation reduces people’s income, (2) having less income makes working risky jobs financially more attractive, (3) this causes more people to die.”
No, the mechanism is: (1) taxation takes money from people, (2) people have less money to spend on their own well-being, and (3) this causes death. For example, someone with a take-home pay after taxes of 40k euros will, compared to someone with 60k euros, eat fewer fresh organic vegetables.
“I don’t think people taking riskier jobs, as the VSL approach would assume, is the primary negative impact of taxation. Rather, I think reducing people’s spendable income makes them less likely to buy healthy food, less likely to live in air-conditioned or heated houses, and less likely to be able to afford medical bills.”
This was my point. We need to research how many people these effects kill. But I am forced to use the inaccurate and improper VSL in my cost-benefit analysis because we have no better number.
“I can imagine that taxing people to the point that they enter poverty (as you suggested) makes things a lot worse for them. Most countries have some type of tax-free threshold under which you don’t have to pay income taxes. Low incomes are only taxed relatively little.”
We agree that taxing poor people has a high mortality cost. But there is also a mortality difference between a middle-class lifestyle and an upper-middle-class lifestyle. Much of the tax burden in developed countries falls on the middle class, and they do suffer meaningfully from those taxes.
“I expect the sign on most taxes to be negative (i.e. reducing mortality), at least when the tax incidence is not on people in poverty and public funds are spent on sensible projects. ”
Please see the clarification I added at the beginning of the post. The tax itself will always kill a nonzero number of people; the value of the spending after taxes are raised, and whether it outweighs the cost of the tax, is a different issue.