NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Matthew Weinzierl

NBER Working Paper No. 22462
Issued in July 2016, Revised in October 2016
NBER Program(s):Public Economics

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.

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Document Object Identifier (DOI): 10.3386/w22462

Published: 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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