* John B. Milliken Professor of Taxation, University of Southern California Law School. A.B., Brown University; M.A.T., Harvard Graduate School of Education; J.D., Harvard Law School. An earlier version of this Article was presented at “The State of the Federal Income Taxation Symposium: Rates, Progressivity, and Budget Processes” at Boston College Law School. I would like to thank the participants at this conference for their comments. In addition, I would like to thank Linda Beres for her significant comments and editorial assistance.
1 See generally Joseph Bankman & Thomas Griffith, Social Welfare and the Rate Structure: A New Look at Progressive Taxation, 75 Cal. L. Rev. 1905 (1987).
2 Id. at 1947.
3 Id. at 1919–21.
4 Id. at 1937–41.
5 Id. at 1929–45.
6 Bankman & Griffith, supra note 1, at 1945–67.
7 Id. at 1966–67.
8 See id. at 1910–15 (discussing briefly the literature on the impact of tax rates on the labor supply as of 1987).
9 See infra notes 20–44 and accompanying text.
10 See infra notes 45–82 and accompanying text.
11 See infra notes 83–118 and accompanying text.
12 See infra notes 119–151 and accompanying text.
13 See infra notes 152–176 and accompanying text.
14 See infra notes 177–185 and accompanying text.
15 The government also might (and should) have an interest in improving the well-being of noncitizens, but I do not address that complexity here.
16 The classic critique of benefits received and sacrifice theories in the legal literature is in Walter J. Blum & Harry Kalven, Jr., The Uneasy Case for Progressive Taxation, 19 U. Chi. L. Rev. 417 (1952). This essay was reprinted one year later as a book with an updated foreword. See generally Walter J. Blum & Harry Kalven, Jr., The Uneasy Case for Progressive Taxation (1953). References in this Article are for the latter. A more recent critique of arguments for progressive taxation can be found in Jeffrey A. Schoenblum, Tax Fairness or Unfairness? A Consideration of the Philosophical Bases for Unequal Taxation of Individuals, 12 Am. J. Tax Pol’y 221 (1995). Strangely, Professor Schoenblum classifies equal and proportionate sacrifice theories as utilitarian, even though neither seeks to maximize utility. See id. at 237–41. For an interesting analysis of some of the philosophical arguments for progressivity and their relationship to public opinion, see generally Marjorie E. Kornhauser, Equality, Liberty and a Fair Income Tax, 23 Fordham Urb. L.J. 607 (1996).
17 See generally Robert Nozick, Anarchy, State, and Utopia (1974) (opposing redistribution); John Rawls, A Theory of Justice (1971) (supporting redistribution).
18 For a brief discussion of alternative measures of social welfare, see Bankman & Griffith, supra note 1, at 1948–50.
19 For classic utilitarian principles, see Jeremy Bentham, Introduction to the Principles of Morals and Legislation (J.H. Burns & H.L.A. Hart eds., Clarenden Press 1996) (1789) and John Stuart Mill, Utilitarianism (Roger Crisp ed., Oxford Univ. Press 1988) (1861). For a more recent utilitarian argument, see R.M. Hare, Moral Thinking: Its Levels, Method, and Point (1981). For a powerful axiomatic argument for utilitarianism, see John C. Harsanyi, Cardinal Welfare, Individualistic Ethics, and Interpersonal Comparisons of Utility, 63 J. Pol. Econ. 309 (1955). Essays debating utilitarianism are contained in J.J.C. Smart & Bernard Williams, Utilitarianism: For and Against (1973) and Utilitarianism and Beyond (Amartya Sen & Bernard Williams eds., 1982).
20 Blum & Kalven, supra note 16, at 57–63; Lionel Robbins, The Nature and Significance of Economic Science, in The Philosophy of Economics: An Anthology 113, 129–32 (Daniel M. Hausman ed., 1984).
21 Joshua Greene & Jonathan Baron, Intuitions About Declining Marginal Utility, 14 J. Behav. Decision Making 243, 244–45 (2001).
22 The formula is U_y = k (log Y). See Bankman & Griffith, supra note 1, at 1952. See generally J.A. Mirrlees, An Exploration in the Theory of Optimum Income Taxation, 38 Rev. Econ. Stud. 175 (1971).
23 Typically, the median student in the class shows indifference in a choice between the lottery and a certain income of about $80,000.
24 This question was asked of U.S. citizens by the National Opinion Research Center. Nat’l. Opinion Res. Ctr., Univ. of Chi., General Social Survey: 1972–2000 Cumulative Codebook, Codebook Variable: Happy, at http://webapp.icpsr.umich.edu/GSS//
rnd1998/merged/cdbk/happy.htm (last modified May 1, 2001).
25 The life satisfaction score in the World Values Survey II is based on this question. Ed Diener & Eunkook Mark Suh, National Differences in Subjective Well-Being, in Well-Being: The Foundations of Hedonic Psychology 434, 435 (Daniel Kahneman et al. eds., 1999) [hereinafter Well-Being].
26 In one survey, for example, individuals were asked the following two questions: (1) “How happy are you?” and (2) “How many dates did you have in the last month?” Daniel Kahneman, Objective Happiness, in Well-Being, supra note 25, at 3, 22. If the happiness question was asked first, the correlation between the two answers was 0.12. If the dates question preceded the happiness question, the correlation was 0.66. Id.; see also Norbert Schwarz & Fritz Strack, Reports of Subjective Well-Being: Judgmental Processes and Their Methodological Implications, in Well-Being, supra note 25, at 61, 62–64, 79.
27 Kahneman, supra note 26, at 19–20.
28 Id.
29 Id. at 20.
30 Id.
31 Id. Similar results were obtained in laboratory experiments involving loud noises and in clinical evaluations of the reported pain of patients undergoing a colonoscopy. Id.
32 Arthur A. Stone et al., Ecological Momentary Assessment, in Well-Being, supra note 25, at 26, 28. See generally Norbert Schwarz & Seymour Sudman, Autobiographical Memory and the Validity of Retrospective Reports (1994).
33 Stone et al., supra note 32, at 28.
34 Schwarz & Strack, supra note 26, at 75.
35 Id. at 76.
36 Id.
37 Id. at 67.
38 Id.
39 See Ed Diener & Richard E. Lucas, Personality and Subjective Well-Being, in Well-Being, supra note 25, at 213, 215 (reporting a 0.70 correlation for pleasant moods and a 0.74 correlation for unpleasant moods). See generally Ed Diener et al., Person X Situation Interactions: Choice of Situations and Congruence Response Models, 47 J. Personality & Soc. Psychol. 580 (1984).
40 See Diener & Lucas, supra note 39, at 214.
41 Diener & Suh, supra note 25, at 437.
42 Galina Balatsky & Ed Diener, Subjective Well-Being Among Russian Students, 28 Soc. Indicators Res. 225, 238–39 (1993); Diener & Suh, supra note 25, at 437.
43 Robert H. Frank, Luxury Fever 68–71 (1999).
44 For a good summary of the issues surrounding the measurement of individual happiness by surveys, see Bernard M.S. van Praag & Paul Frijters, The Measurement of Welfare and Well-Being: The Leyden Approach, in Well-Being, supra note 25, at 413.
45 Ronald Inglehart & Hans-Dieter Klingemann, Genes, Culture, Democracy, and Happiness, in Culture and Subjective Well-Being 165, 166–67 (Ed Diener & Eunkook M. Suh eds., 2000).
46 Ed Diener & Shigehiro Oishi, Money and Happiness: Income and Subjective Well-Being Across Nations, in Culture and Subjective Well-Being, supra note 45, at 185, 198–201; Inglehart & Klingemann, supra note 45, at 170. See generally Ronald Inglehart, Modernization and Postmodernization: Cultural, Economic, and Political Change in 43 Societies (1997); World Values Survey, http://www.worldvaluessurvey.org/.
47 Inglehart & Klingemann, supra note 45, at 167–69; see Piet Ouweneel & Ruut Veenhoven, Cross-National Differences in Happiness: Cultural Bias or Social Quality?, in Contemporary Issues in Cross-Cultural Psychology 168, 171–73 (Nico Bleichrodt & Pieter J.D. Drenth eds., 1991).
48 See Diener & Oishi, supra note 46, at 199 tbl.8.2. Figure 1 is based on data from Ed Diener and Shigehiro Oishi. Id. Where available, income is based on purchasing power parity using U.S. dollars. Gross national product per capita is used in the few cases in which purchasing power parity is not available. Id. at 199. Life satisfaction is a standard score derived from the World Values Survey II and one other survey. Id. at 198–99.
49 A correlation of 0.686 was obtained by the author using Microsoft Excel. See Diener & Oishi, supra note 46, at 198 (stating a correlation of 0.69).
50 See Inglehart & Klingemann, supra note 45, at 171.
51 These calculations were made by the author using Microsoft Excel.
52 The slope of the regression line is 0.000104.
53 These calculations were made by the author using Microsoft Excel.
54 The slope of the regression line is 0.000019.
55 See, e.g., Diener & Oishi, supra note 46, at 194–97; Ruut Veenhoven, Is Happiness Relative?, 24 Soc. Indicators Res. 1, 26–27, 32 (1991).
56 See Inglehart & Klingemann, supra note 45, at 171.
57 Id. at 171, 172–73 tbl.7.1, 174 fig. 7.3.
58 Id. at 171.
59 Id. at 177–79 (finding a correlation of 0.78).
60 See id. at 179.
61 Inglehart & Klingemann, supra note 45, at 179.
62 See id. at 179–80.
63 Diener & Oishi, supra note 46, at 201. For studies finding almost no correlation between human rights and subjective well-being once income is controlled, see generally Ed Diener et al., Factors Predicting the Subjective Well-Being of Nations, 69 J. Personality & Soc. Psychol. 851 (1995).
64 See Andrew J. Oswald, Happiness and Economic Performance, 107 Econ. J. 1815, 1816 (1997).
65 Short-term macroeconomic effects such as a recession, however, may have a significant impact on happiness. See Rafael Di Tella et al., The Macroeconomics of Happiness, 85 Rev. Econ. & Stat. 809, 823 (2003).
66 The income data are from the U.S. Census Bureau’s Historical Income Tables—People, which incorporates data from the Current Population Survey, Annual Demographic Supplements. U.S. Census Bureau, Table P-1: Total CPS Population and per Capita Money Income: 1967 to 2001 (published Sept. 30, 2002), http://www.census.gov/hhes/
income/histinc/p01.html (last revised May 13, 2004). The happiness data are from the National Opinion Research Center. Nat’l. Opinion Res. Ctr., Univ. of Chi., General Social Survey: 1972–2000 Cumulative Codebook, Codebook Trends: Happy, at http://webapp.
icpsr.umich.edu/GSS//rnd1998/merged/cdbk-trn/happy.htm (last modified May 1, 2001).
67 Indeed, the correlation between per capita income and the portion of respondents indicating that they were “very happy” was -0.34. Alternatively, a “happiness index” can be created by assigning a value from one to three for the responses “not too happy,” “pretty happy,” and “very happy,” respectively. There was a weak positive correlation of 0.10 between income and the happiness index. Little weight should be given, however, to the specific correlations, because for either measure of happiness, there was little change during the twenty-year period. These correlations were calculated by the author using Microsoft Excel.
68 These calculations were made by the author using Microsoft Excel.
69 These calculations were made by the author using Microsoft Excel. The overall happiness index, described above, averaged 2.21 for both the 1972 to 1976 and 1994 to 1998 periods. See supra note 67.
70 Diener & Oishi, supra note 46, at 202; Ed Diener & Eunkook M. Suh, Measuring Quality of Life: Economic, Social and Subjective Indicators, 40 Soc. Indicators Res. 189, 209, 211 tbl.I (1997); Diener & Suh, supra note 25, at 441; see also Bruno S. Frey & Alois Stutzer, What Can Economists Learn from Happiness Research?, 40 J. Econ. Literature 402, 413–14 (2002). For a recent study finding that happiness declined in the United States and was flat in Great Britain over the past twenty-five years, see David G. Blanchflower & Andrew J. Oswald, Well-Being over Time in Britain and the USA, 88 J. Pub. Econ. 1359, 1380 (2004).
71 The figures and calculations are based on data reported by Ed Diener and Shigehiro Oishi. See Diener & Oishi, supra note 46, at 203 tbl.8.3. Luxembourg was included in Diener and Oishi’s analysis, but it is excluded here because data on that nation’s economic growth rate was not stated.
72 The regression was calculated by the author using Microsoft Excel. The slope of the regression line is 0.00528. The correlation between economic growth and subjective well-being growth is 0.098.
73 Portugal’s slope of subjective well-being was 0.09. The next highest nation was Italy with a slope of 0.04. Diener & Oishi, supra note 46, at 203 tbl.8.3.
74 The correlation, excluding Portugal, is -0.0239.
75 Michael R. Hagerty & Ruut Veenhoven, Wealth and Happiness Revisited—Growing National Income Does Go with Greater Happiness, 64 Soc. Indicators Res. 1, 3 (2003).
76 See id. at 8–9.
77 Id. at 9.
78 See id. at 13 tbl.III. Average gross domestic product (“GDP”) per capita (in 1995 U.S. dollars) in the richest group of nations varied from a high of $19,874 in Norway to a low of $17,584 in the United States. Id. at 10 tbl.II.
79 See id. at 13 tbl.III. Average GDP per capita in the middle group of nations varied from a high of $15,372 in France to a low of $8953 in Ireland. Id. at 10 tbl.II.
80 See Hagerty & Veenhoven, supra note 75, at 13 tbl.III. Average GDP per capita in the lowest income nations varied from a high of $8144 in Spain to a low of $321 in India. Id. at 10 tbl.II.
81 The calculation for a poor nation is 1.67/0.045 = 37.1. The calculation for a rich nation is 1.67/0.024 = 69.6.
82 See infra notes 119–176 and accompanying text.
83 See supra notes 64–81, Figure 4, and accompanying text.
84 The data are from Frey & Stutzer, supra note 70, at 410 tbl.1. The listed income is the total household income in 1996 U.S. dollars divided by the square root of the total number of household members. Id. at 410.
85 Id.
86 The calculation for additional income is $14,763 - $2,586 = $12,177. The calculation for utility gain is 2.19 - 1.94 = 0.25.
87 The calculation for average increase in happiness is 0.25/12.177 = 0.0205.
88 The calculation for additional income is $61,836 - $17,666 = $44,170. The calculation for utility gain is 2.36 - 2.29 = 0.07.
89 The calculation for average increase in happiness is 0.07/44.17 = 0.0016.
90 The calculation is 0.0205/0.0016 = 12.81.
91 From 1972 to 1974, an additional $1000 produced an increase in happiness of 0.0246 in the bottom five deciles and 0.0023 in the top five deciles. An additional dollar of income within the low-income range had more than ten times the impact of an additional dollar within the high-income range.
92 Frey & Stutzer, supra note 70, at 409.
93 Michael Argyle, Causes and Correlates of Happiness, in Well-Being, supra note 25, at 353, 356–57 & figs. 18.1, 18.2.
94 See supra notes 64–70 and accompanying text.
95 These calculations were made by the author using data from Table 1. See supra note 84, Table 1, and accompanying text.
96 Richard A. Easterlin, Income and Happiness: Towards a Unified Theory, 111 Econ. J. 465, 472 (2001).
97 See supra notes 64–81 and accompanying text.
98 Sara J. Solnick & David Hemenway, Is More Always Better?: A Survey on Positional Concerns, 37 J. Econ. Behav. & Org. 373, 377 (1998).
99 Id. at 378. See generally Richard Layard, Towards a Happier Society, 2003 New Statesman 26 (discussing the survey).
100 Solnick & Hemenway, supra note 98, at 379.
101 Id. at 378–79.
102 Fredrik Carlsson et al., Do You Enjoy Having More Than Others? Survey Evidence of Positional Goods 11–12 (Göteborg Univ. Dept. of Econ., Working Papers in Economics No. 100, 2003), available at http://www.handels.gu.se/epc/archive/00002855/
01/gunwpe0100.pdf.
103 Id. at 6.
104 Id. at 7, 21 tbl.1.
105 Id.
106 See id. Table 2 is based on data from Fredrik Carlsson, Olof Johansson-Stenman, and Peter Martinsson. See id. The income reduction column of Table 2, however, was calculated by the author.
107 Carlsson et al., supra note 102, at 8. Note that if the number of leisure hours per week in the absence of any work is eighty, then the percentage of leisure lost by choosing Society B is equal to the percentage work increase from choosing Society B.
108 Id. at 9, 21 tbl.1.
109 Id. at 21 tbl.1.
110 Id. at 12, 21 tbl.1.
111 Andrew E. Clark & Andrew J. Oswald, Satisfaction and Comparison Income, 61 J. Pub. Econ. 359, 360 (1996).
112 Daniel Zizzo & Andrew Oswald, Are People Willing to Pay to Reduce Others’ Income?, 63–64 Annales d’Economie et de Statistique, July–Dec. 2001, at 12 & 39 fig. 2, available at http://www.adres.prd.fr/annales/anciensnumeros/resumes/n6364/4.pdf.
113 Layard, supra note 99, at 26; see Frank, supra note 43, at 228. For an excellent analysis of the implications for regulation of concern for relative position, see generally Robert H. Frank & Cass R. Sunstein, Cost-Benefit Analysis and Relative Position, 68 U. Chi. L. Rev. 323 (2001).
114 See generally, e.g., Joseph Bankman, Thomas Griffith & Katherine Pratt, Federal Income Tax: Examples and Explanations (3d ed. 2002).
115 Any marginal tax rate above 20% will prevent Alice from working.
116 See Carlsson et al., supra note 102, at 15.
117 See generally Francisco Alpizar et al., How Much Do We Care About Absolute Versus Relative Income and Consumption? (Göteborg Univ. Dept. of Econ., Working Papers in Economics No. 63, 2001) (forthcoming publication in J. Econ. Behav. & Org. (2004)), available at http://www.handels.gu.se/epc/data/html/html/PDF/gunwpe0063.pdf.
118 Frank & Sunstein, supra note 113, at 353.
119 See supra notes 83–118 and accompanying text.
120 See infra notes 121–151 and accompanying text.
121 Frank, supra note 43, at 111 (citing Angus Campbell, The Sense of Well-Being in America (1981)); see Ada Ferrer-i-Carbonell, Income and Well-Being: An Empirical Analysis of the Comparison Income Effect 3 (Tinbergen Inst., Disc. Paper No. TI 2002-019/3, 2002) (forthcoming publication in J. Pub. Econ. (2004)), available at http://
www.tinbergen.nl/discussionpapers/02019.pdf.
122 Philip Brickman et al., Lottery Winners and Accident Victims: Is Happiness Relative?, 36 J. Personality & Soc. Psychol. 917, 920 (1978).
123 Id. at 921. Lottery winners and controls were asked to rate on a scale from zero to five how pleasant they found each of seven activities or events. In addition to the events listed in the above text, other events included watching television, getting a compliment, reading a magazine, and buying clothes. The mean score for lottery winners was 3.33. The mean score for non-winners was 3.82. Id. at 919–21.
124 Robert E. Lane, The Loss of Happiness in Market Democracies 71 (2000).
125 Alois Stutzer, The Role of Income Aspirations in Individual Happiness, 54 J. Econ. Behav. & Org. 89, 90 (2004); see also Bruno S. Frey & Alois Stutzer, Happiness and Economics 12 (2002).
126 Brickman et al., supra note 122, at 920–21 tbl.1.
127 Id. at 919–21 tbl.1.
128 Kahneman, supra note 26, at 14; see van Praag & Frijters, supra note 44, at 421.
129 van Praag & Frijters, supra note 44, at 422.
130 Id.
131 Frey & Stutzer, supra note 125, at 86. Individuals also make poor predictions of their behavior in other contexts, such as the ability to resist temptation. Visitors to Las Vegas, for example, tend to overestimate their capacities to resist excessive gambling, and credit card users tend to overrate their abilities to maintain a zero balance. George Lowenstein & David Schkade, Wouldn’t It Be Nice? Predicting Future Feelings, in Well-Being, supra note 25, at 85, 92–94.
132 Diener & Lucas, supra note 39, at 216–17.
133 Id. at 216.
134 Id. at 214–15.
135 Argyle, supra note 93, at 359. The positive impact of marriage on happiness is still found after controlling for factors such as age, gender, and income. Id. at 360. Marriage is also strongly correlated with improved mental health, reduced drug use, and better physical health. For a recent review of the literature, see Chris M. Wilson & Andrew J. Oswald, How Does Marriage Affect Physical and Psychological Health? A Survey of the Longitudinal Evidence (2002), at http://www2.warwick.ac.uk/fac/soc/economics/staff/faculty/oswald/wilsonos-waldmarriage
jan2002.pdf.
136 Ferrer-i-Carbonell, supra note 121, at 18.
137 Blanchflower & Oswald, supra note 70, at 1373 (reporting the necessary “compensation” in 1990 U.S. dollars).
138 David G. Blanchflower & Andrew J. Oswald, Money, Sex and Happiness: An Empirical Study 9 (Nat’l Bureau of Econ. Research, Working Paper No. W10499, 2004), available at http://papers.nber.org/papers/w10499.pdf.
139 Legalizing gay marriage, however, might have a significant positive impact on the well-being of same-sex couples. See Mark Strasser, On Same Sex Marriage, Civil Unions and the Rule of Law 23–26, 101–10 (2002) (discussing the importance and benefits of marriage over civil unions for gays and lesbians). See generally David B. Cruz, Just Don’t Call It Marriage: The First Amendment and Marriage as an Expressive Resource, 74 S. Cal. L. Rev. 926 (2001) (discussing the importance and emotional significance of marriage to gay couples).
140 Frank, supra note 43, at 49; Juliet Schor, The Overworked American 29 (1991).
141 Nancy Cantor & Catherine A. Sanderson, Life Task Participation and Well-Being: The Importance of Taking Part in Daily Life, in Well-Being, supra note 25, at 230, 231.
142 See id. at 231–32.
143 Argyle, supra note 93, at 364.
144 Id.
145 Id. Television, however, does have a positive relaxing effect as well. On balance, moderate amounts of television probably improve well-being, but large amounts have a negative impact, especially if television viewing replaces social interaction. See id.
146 Frey & Stutzer, supra note 125, at 114–15. One additional percentage point of unemployment appears to reduce welfare by about as much as 1.7 additional percentage points of inflation. See Rafael Di Tella et al., Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness, 91 Am. Econ. Rev. 335, 339 (2001).
147 Frey & Stutzer, supra note 125, at 99–100; Argyle, supra note 93, at 363–64.
148 Frey & Stutzer, supra note 125, at 99.
149 Di Tella et al., supra note 65, at 819.
150 Id.
151 See id. at 821 (finding that increased unemployment benefits improved societal well-being). Rafael Di Tella, Robert J. MacCulloch, and Andrew J. Oswald found no evidence that generous welfare benefits were responsible for high unemployment rates in Europe. Id. at 822.
152 See infra notes 153–176 and accompanying text.
153 Diener & Oishi, supra note 46, at 205–07.
154 Alberto Alesina et al., Inequality and Happiness: Are Europeans and Americans Different? 88 J. Pub. Econ. 2009, 2034 (2004).
155 Id. at 2033–34. The definitions used are broad. Rich and poor are defined as the top and bottom halves of the income distribution. Leftist and rightist include those slightly to the left and right of the political center. For example, in the United States, leftist includes all Democrats and Independents leaning towards the Democrats. See id. at 2030–31.
156 Id. at 2033–34.
157 Rafael Di Tella & Robert MacCulloch, Partisan Social Happiness, Rev. Econ. Stud. 22 (manuscript forthcoming n.d.), available at http://www.restud.org.uk/PDF/03_2004/
Di_Tella_%20Macculloch.pdf (date posted Mar. 2004).
158 Alesina et al., supra note 154, at 2033–34.
159 See Alberto Alesina et al., Why Doesn’t the United States Have a European-Style Welfare State?, 2 Brookings Papers on Econ. Activity 187, 243 tbl.13. (2001).
160 Id.
161 Id.
162 Albert Alesina & Edward L. Glaeser, Fighting Poverty in the U.S. and Europe 17 tbl.2.1 (2004). The European number is the simple average of data from the following thirteen nations: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, and Sweden. Id. at 17 tbl.2.1.
163 Id. at 19 tbl.2.2.
164 Id. at 3, 57–60.
165 Id. at 3–4, 60–68.
166 See id. at 10, 134.
167 Alesina et al., supra note 159, at 230.
168 Id.
169 Id. at 229.
170 Alesina & Glaeser, supra note 162, at 10.
171 Seymour Martin Lipset, American Exceptionalism: A Double-Edged Sword 133 (1996); Alesina et al., supra note 159, at 229.
172 Alesina et al., supra note 159, at 229; Erzo F.P. Luttmer, Group Loyalty and the Taste for Redistribution, 109 J. Pol. Econ. 500, 508–11 (2001).
173 Alberto Alesina et al., Political Jurisdictions in Heterogeneous Communities (Harv. Inst. of Econ. Research, Discussion Paper No. 1949, 2002) available at http://
post.economics.harvard.edu/hier/2002papers/HIER1949.pdf.
174 Alesina et al., supra note 159, at 235–36 (relying on data from 1990).
175 Id. at 229–32.
176 See generally Little Rock Central High 40th Anniversary Comm’n, September, 1997—The 40th Anniversary of One of America’s Most Important Civil Rights Events (2000), at http://www.centralhigh57.org (last visited Oct. 15, 2004) (celebrating, through multimedia website, heroism of black students who desegregated the high school in 1957); Bill Moyers, A Walk Through the 20th Century with Bill Moyers, Episode 1: Marshall, Texas (Corp. for Entm’t & Learning 1984) (illustrating, through documentary film, changed racial relations in town of Marshall, Texas).
177 See supra notes 113–118 and accompanying text.
178 The classic analysis of goods purchased for the purpose of demonstrating the owner’s wealth or social status was made by Thorstein Veblen, who coined the phrase “conspicuous consumption.” Thorstein Veblen, The Theory of the Leisure Class 68–101 (Viking Press 1965) (1899). For a recent article advocating policy interventions to reduce the overconsumption of positional goods, see Carlsson et al., supra note 102, at 2–3.
179 John Stuart Mill, Principles of Political Economy with Some of Their Applications to Social Philosophy, bk. 5, ch. 6, pt. 7 (W.J. Ashley, ed., Longmans, Green & Co. 1909) (1848) (basing edition on seventh edition prepared by John Stuart Mill), available at http://www.econlib.org/library/Mill/mlPContents.html (last visited Oct. 15, 2004).
180 See Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, 104 Stat. 1388-439 (repealed 2002). The Revenue Reconciliation Act of 1990 placed a 10% tax on the excess of any money spent above the threshold price of $30,000 on automobiles. In 1998, the tax was reduced to 8% of any amount in excess of $36,000. The tax was then phased down yearly until December 31, 2002, when it was repealed. See id.
181 See also Frank, supra note 43, at 205 (noting that the explosive sales of SUVs coincided with the imposition of the tax on luxury automobiles).
182 A Porsche 911 Carrera is likely to cost at least $80,000 and may cost more than double that amount, depending on the model and options. A well-equipped Mazda Miata costs less than $30,000.
183 Such neighbors might include celebrity Prius owners Bill Maher, Larry David, and Arianna Huffington. See Larry Armstrong, Toyota’s New Prius: The Hottest Hybrid, Bus. Wk. Online (Sept. 4, 2003), at http://www.businessweek.com/technology/content/sep2003/
tc2003094_0298_tc127.htm (noting that “what this car says about the owner is undoubtedly the reason it has a celebrity following”).
184 See Alesina et al., supra note 154, at 2033–34.
185 See Diener & Suh, supra note 25, at 445–46.