Joel Slemrod ’73 Finds Humor in History of Taxes

In Joel Slemrod ’73’s stamp collection, a favorite stands out: An orange one-centavo Peruvian stamp issued in 1881 during the Ten Cents War, a conflict that arose because Chilean mining companies in Peru refused to pay taxes.

It’s no wonder he likes this revenue-related rarity. Slemrod, a professor of economics at the University of Michigan, ranks as one of the nation’s top tax experts. He and co-author Michael Keen of the International Monetary Fund have written Rebellion, Rascals, and Revenue, a new book about the history of taxation that The Wall Street Journal calls “erudite yet good-humored.”

“We understand most people find this subject unpleasant and dry,” says Slemrod. “The book conveys lessons about taxation in ways that people will enjoy, so they won’t notice that they’re learning.”

His book’s whimsy masks practical policy proposals, like a carbon tax to compel businesses to consider the social costs of burning carbon fuels. Using anecdotes about Lady Godiva, William Tell, Genghis Khan, Shakespeare, Elvis, Martin Luther King, and Vlad the Impaler, Slemrod explains the “spectacular failures and successes” of various taxes and the “messy realities” of making tax policy. 

He reveals that throughout history, governments have raised revenue by taxing almost everything — chimneys, urine, shadows, fireplaces, clocks, beards, bachelorhood, bricks, and more. Whether writing about Cleopatra or Grover Cleveland, Slemrod returns again and again to a timeless truth: “When it comes to designing and implementing taxes, our ancestors were addressing fundamentally the same problems that we struggle with today.”

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His love of economics began when, as a freshman, his Econ 10 preceptor was provost William Bowen *58. “He and I hit it off, and I remember walking after class, talking,” says Slemrod. “It didn’t dawn on me that he was provost. I don’t think I knew why were we walking back to Nassau Hall.”

Slemrod has been a consultant to the U.S. Treasury and the governments of Canada, South Africa, and New Zealand, and in 2012 he was awarded the National Tax Association’s Daniel M. Holland Medal for distinguished lifetime contributions to the study and practice of public finance. 

He won an honor of a different sort in 2003, when the Review of Economics and Statistics published his intentionally offbeat paper, “Dying to Save Taxes: Evidence from Estate Tax Returns on Death Elasticity.” It held that when the estate tax goes up or down, it affects when people pass away. “If it’s going to save heirs some money by dying after a certain date, one way or the other that date gets postponed,” says Slemrod.

For penning this grave article, the Annals of Improbable Research honored Slemrod with one of its annual satiric “Ig Noble” prizes for unusual academic research. Later, when he was consulting for the IRS and underwent a security check, the man sent to ask him questions “looked up and said, ‘I see on your CV that you won a Nobel Prize,’” Slemrod recalls. “And I said, ‘Not exactly. If you look closely, I won an Ig Noble prize,’ and I had to explain to him the difference.’”