Albaby:Interesting point and in general, I agree with it. However, I'm interested in your opinion of using the tax code as a behavioral incentive, specifically in reference to your point that the loss of efficiency and tax neutrality is a deadweight loss to the overall economy.An example would be the "sin" taxes on alcohol and tobacco. Certainly these taxes affect the equilibrium supply and demand price point and remove some efficiency from those markets. However, isn't society better off for that lack of efficiency?I see two possible cases where this is beneficial. One is where we lose efficiency in a particular market but gain economic utility as a whole. The other is where non-neutrality provides a non-economic utility or perhaps a meta-efficiency that benefits society.
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