Tax Policy and Fair Inequality

22 Pages Posted: 2 Apr 2012

See all articles by Alexander W. Cappelen

Alexander W. Cappelen

Norwegian School of Economics (NHH) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics

Date Written: February 12, 2012

Abstract

The standard economic approach to tax policy has to a large extent relied on welfarist theories of justice, in particular the utilitarian view that the government should try to maximize the sum of individual welfare. This welfarist framework has proved a productive point of departure for much economic analysis, but it has an important limitation in its inability to take into account considerations of personal responsibility. Welfarist theories evaluate policies solely on the basis of their consequences for individual welfare, and thus do not assign any intrinsic importance to how a specific situation came about.

Keywords: Tax policy, Income inequality, Fairness

JEL Classification: D31, D63, J31

Suggested Citation

Cappelen, Alexander W. and Tungodden, Bertil, Tax Policy and Fair Inequality (February 12, 2012). NHH Dept. of Economics Discussion Paper No. 3/2012, Available at SSRN: https://ssrn.com/abstract=2033071 or http://dx.doi.org/10.2139/ssrn.2033071

Alexander W. Cappelen (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

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