Spreading the Wealth Around: Reflections Inspired by Joe the Plumber
This essay discusses the policy debate concerning optimal taxation and the distribution of income. It begins with a brief overview of trends in income inequality, the leading hypothesis to explain these trends, and the distribution of the tax burden. It then considers the framework that economists use to address the normative problem of designing tax systems. The conventional utilitarian approach is found to be wanting, as it leads to prescriptions that conflict with many individuals' moral intuitions. The essay then explores an alternative normative framework, dubbed the Just Deserts Theory, according to which an individual's compensation should reflect his or her social contribution.
Presidential Address presented at the February 2010 meetings of Eastern Economic Association. I am grateful to Joshua Bookin, Stacy Carlson, and participants at the EEA meetings for helpful comments. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
N Gregory Mankiw, 2010. "Spreading the Wealth Around: Reflections Inspired by Joe the Plumber," Eastern Economic Journal, Palgrave Macmillan Journals, vol. 36(3), pages 285-298. citation courtesy of