Popular Acceptance of Morally Arbitrary Luck and Widespread Support for Classical Benefit-Based Taxation

by Matthew C. Weinzierl

Overview — This paper presents survey evidence that the normative views of most Americans appear to include ambivalence toward the egalitarianism that has been so influential in contemporary political philosophy and implicitly adopted by modern optimal tax theory. Insofar as this finding is valid, optimal tax theorists ought to consider capturing this ambivalence in their work, as well.

Author Abstract

Public moral reasoning is shown to differ in three specific ways from what is conventionally assumed in modern optimal tax theory. Large majorities of survey respondents resist costless redistribution of arbitrarily determined unequal outcomes and prefer justifying tax progressivity based on benefit received rather than on diminishing marginal social welfare of income. These attitudes are shown to be linked to widespread moral acceptance of unequal allocations due to luck. Together, these results raise the possibility that the American public views the allocations of taxes and pre-tax outcomes as morally relevant, a judgment that is inconsistent with conventional objectives depending solely on after-tax outcomes but consistent with alternative principles such as Classical Benefit-Based Taxation.