NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism

Louis Kaplow

NBER Working Paper No. 4961 (Also Reprint No. r2031)
Issued in December 1994
NBER Program(s):   PE

Anti-utilitarian norms often are used in assessing tax systems. Two motivations support this practice. First, many believe utilitarianism to be insufficiently egalitarian. Second, utilitarianism does not give independent weight to other equitable principles, notably concerns that reforms may violate horizontal equity or result in rank reversals in the income distribution. This investigation suggests that a policy maker who believes in the Pareto principle -- that any reform preferred by everyone should be adopted - - cannot consistently adhere to any of these anti-utilitarian sentiments. Moreover, the affirmative case for utilitarian tax policy assessment is stronger than is generally appreciated.

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Document Object Identifier (DOI): 10.3386/w4961

Published: National Tax Journal, vol. 48, no. 4, pp. 497-514, (1995).

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