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

29 Pages Posted: 12 Dec 1997

See all articles by Louis Kaplow

Louis Kaplow

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

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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.

JEL Classification: H20, D63

Suggested Citation

Kaplow, Louis, A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism. Available at SSRN: https://ssrn.com/abstract=42587 or http://dx.doi.org/10.2139/ssrn.42587

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