What No One Tells You About Tax Policy and Rational Incentive Design

Wed, 02 Sep 2026 09:00:00 -0400

You will never see it on a campaign bumper sticker, but here is a confession from someone who spends too much time in tax scholarship: the tax code is not really about money.

That sounds ridiculous on the surface. Obviously, a tax collects dollars. That part is real. But the more interesting function of taxation is behavioral. Every deduction, every levy, every oddly specific phase-out threshold is doing double duty: it raises a little revenue and, far more importantly, it pushes people toward or away from certain choices.

Public Finance on Rational America

What No One Tells You About Tax Policy and Rational Incentive Design