The title of this post is one of the central questions in a new article by Megan McArdle of Bloomberg. So, does she have a good point?

Taxing a Professor’s Privilege

I’ve been reading Thomas Piketty’s “Capital in the Twenty-First Century.” You’ll have to wait on my thoughts on the book until they’re a bit more fully formed. As I’ve been reading, though, I keep returning to a question I heard at an economics conference a couple of months back: If we did implement a wealth tax, should it tax tenure?

Professorial tenure is, after all, a valuable asset. As long as you show up and teach your classes, and you don’t make passes at your students or steal from the department’s petty cash drawer, you can draw a paycheck for the rest of your working life. And since the abolition of mandatory retirement ages, that working life can be as long as you like.

Ah, you will say, there are risks: Your school could go out of business, or you might get ill and be unable to work, or inflation could eat away at the value of that paycheck. Just so. All assets are risky. That doesn’t make them worthless; it just means that the price has to take the potential downsides into account.

Why single out professors? you ask. Isn’t this just more academic-bashing? You’re quite right: We shouldn’t single out professors. Everyone with civil-service protections or similar employment guarantees should probably have that asset taxed.