Give up. Taxation isn’t about optimality, it’s about power and perception. The primary question is “how much can the authority extract without losing the constituency”.
I think there’s two ways we can approach this.
One is as an interesting problem to look at. It’s not necessarily that policy proposals will be adopted, but exploring policies is an interesting exercise, and it may lead to marginally better policies or even Pareto improvements in policy if they were adopted. And following the idea that the purpose of policy exploration is to have ready-at-hand better policies/ideas when a crisis strikes and people are looking for alternatives because the current system isn’t working, it seems worth doing this work even if it doesn’t seem clear what the path to adoption is.
The second is that you’re right, humans often forego “better” solutions for ones that better serve other purposes. For example, is taxing income a good idea? Probably not, but it’s relatively easy to do and to understand, so it’s a straightforward policy choice. Does this mean we can’t consider alternative taxation systems to the one we have, though? I think it doesn’t, only that people developing policy must eventually consider things other than economic efficiency if they hope to develop policies that are likely to be adopted.
I think there’s two ways we can approach this.
One is as an interesting problem to look at. It’s not necessarily that policy proposals will be adopted, but exploring policies is an interesting exercise, and it may lead to marginally better policies or even Pareto improvements in policy if they were adopted. And following the idea that the purpose of policy exploration is to have ready-at-hand better policies/ideas when a crisis strikes and people are looking for alternatives because the current system isn’t working, it seems worth doing this work even if it doesn’t seem clear what the path to adoption is.
The second is that you’re right, humans often forego “better” solutions for ones that better serve other purposes. For example, is taxing income a good idea? Probably not, but it’s relatively easy to do and to understand, so it’s a straightforward policy choice. Does this mean we can’t consider alternative taxation systems to the one we have, though? I think it doesn’t, only that people developing policy must eventually consider things other than economic efficiency if they hope to develop policies that are likely to be adopted.