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

22 Pages Posted: 1 Aug 2016 Last revised: 18 May 2023

See all articles by Matthew Weinzierl

Matthew Weinzierl

Harvard Business School - Business, Government and the International Economy Unit

Date Written: July 2016

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.

Suggested Citation

Weinzierl, Matthew, Popular Acceptance of Inequality Due to Brute Luck and Support for Classical Benefit-Based Taxation (July 2016). NBER Working Paper No. w22462, Available at SSRN: https://ssrn.com/abstract=2816759

Matthew Weinzierl (Contact Author)

Harvard Business School - Business, Government and the International Economy Unit ( email )

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