Popular Acceptance of Morally Arbitrary Luck and Widespread Support for Classical Benefit-Based Taxation

Abstract

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 theory. A large share, and in some cases a large majority, of respondents resist full equalization of economic outcomes determined entirely by luck. A similar share prefer a justification of tax progressivity that relies on a benefit-based logic rather than diminishing marginal social welfare of income, the conventional logic. Moreover, these two views are linked: respondents who more strongly resist redistribution are more likely to prefer the benefit-based principle. Together, these results raise the possibility that the American public views the allocations of taxes and pre-tax outcomes as morally relevant, a judgment that is inconsistent with conventional consequentialist objectives.