Popular Acceptance of Inequality due to Brute Luck and Support for Classical Benefit-Based Taxation

No 22462, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: U.S. survey respondents’ views on distributive justice are shown to differ in two specific, related ways from what is conventionally assumed in modern optimal tax research. A large share of respondents, and in some cases a large majority, resist the full equalization of inequality due to brute luck that standard analyses would recommend. Related, a similar share prefer a classical benefit-based logic for the assignment of taxes over the conventional logic of diminishing marginal social welfare. Moreover, these two views are linked: respondents who more strongly resist equalization are more likely to prefer the classical benefit-based principle. Together, these results suggest that a large share of the American public views the allocation of pre-tax incomes as relevant to optimal tax policy and—at least in part—justly deserved unless proven otherwise, judgments that are inconsistent with standard welfarist objectives.

JEL-codes: D63 H21 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-pbe
Note: PE
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Citations: View citations in EconPapers (3)

Published as Matthew Weinzierl, 2017. "Popular Acceptance of Inequality due to Innate Brute Luck and Support for Classical Benefit-Based Taxation," Journal of Public Economics, .

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