Good Taxes or Bad Taxes?

One of the economic ideas about public policy that comes from the concept of a corrective tax for a negative externality is that in choosing tax bases we should tax the "bad things" (e.g. pollution) while leaving the "good things" (e.g. income, savings, investment) untaxed. GREG LOPEZ has a different view:

My rejection in a nutshell: The knowledge of which things are good or bad, in which circumstances of time and place, and to what dollar amount, are beyond the reach of anyone including policymakers; but even absent the knowledge problem, the incentive problem ensures that the enacted policies would be diverted by compromise from what little we do happen to know of the public interest.

In short, Hayek and Buchanan trump Pigou.

[ Hat Tip: Peter Boettke ]