Chris Dillow posted recently on a beauty tax, asking whether it was any more ridiculous than a tax on the rich. He supports a tax on the rich, in part, because of moral luck. Because you are lucky to be born talented or hard-working. Exactly the same logic can be applied to a tax on beauty, height, or much anything else.
Greg Mankiw applied (PDF) the logic of optimal taxation to height and found that it would imply significantly higher taxes for the tall. I think that the conclusion he takes from being able to draw this inference also applies to the argument Dillow makes:
The Times also quotes a critic:
Peter Diamond, an economist at M.I.T., says the paper’s basic mistake is the notion “that if you can draw a silly inference from an approach, then that discredits a model.” He comments: “I think there is probably no model that passes that test."
I wonder what Peter's alternative approach is. If economic theorists are allowed to embrace inferences from a model that they like and reject those that they consider "silly," what is the point of theory? That discretion gives the theorist the freedom to always confirm his priors. The economist ends up using theory like a drunk uses a light post--for support rather than illumination.