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.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: March 2016
- HBS Working Paper Number: 16-104
- Faculty Unit(s): Business, Government and International Economy
