A Counter-Reply to Professors Bankman and Weisbach

In “A Critical Look at the Economic Argument for Taxing Only Labor Income,” I challenge the tax substitution argument, which according to accepted wisdom fairly establishes that it is best to tax only labor earnings. A portion of Critical Look is directed at Professors Bankman and Weisbach's application of tax substitution reasoning in two recent articles concerning the choice between income taxation and consumption taxation (which they equate, for purposes of their analysis, to labor-earnings-only taxation). Bankman and Weisbach have now issued a reply to Critical Look. In this counter-reply, I respond to their most important points