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

33 Pages Posted: 7 Jul 2000 Last revised: 29 Jul 2010

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

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Date Written: December 1994

Abstract

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.

Suggested Citation

Kaplow, Louis, A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism (December 1994). NBER Working Paper No. w4961. Available at SSRN: https://ssrn.com/abstract=226560

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