Jun 9 2009, 9:37AM
Do You Need To Be A Utilitarian To Justify The Income Tax?
I'm not sure I've been called an "unprincipled courtier" before. But really, I can't think of any better context in which to have that happen than (1) by the thoughtful Robin Hanson; (2) along with Matt Yglesias; and (3) in the midst of a highly abstract debate over utilitarianism and the optimal taxation of height. The system works!
This goes back a lot of posts (see here and here for the important ones), so let me see if I can summarize this in a fair way. There are two big questions here. The first is: Do you have to justify a progressive income tax on utilitarian grounds? The second is: If some particular element of the progressive income tax conflicts with a deeply held moral intuition, should you abandon the intuition or the tax?
I'm not a moral philosopher or an economist, so I'm not going to
comment on the propriety of economists getting mired in moral
philosophy or vice versa. But since blogging is the apparently the business of
offering under-qualified opinions, I'll try to comment on just about
everything else:
1. The answer to the first question -- do you
have to justify the progressive income tax on utilitarian grounds? --
strikes me as an obvious "No." But it's not clear to me what counting
up people who do and do not support progressive income taxation for
utilitarian reasons is supposed to prove. I'm sure long lists can be
produced on both sides of the battlefield. I don't think anyone in the
debate holds the position that the best argument is the most popular.
2. I like John Rawls and think he offers good justifications for progressive taxation. But I agree with Hanson that it isn't obvious
whether Rawls would reject a tax on height. (I asked after this in my second post on the subject.) Specifically, it isn't clear to me that such a tax violates the greatest equal liberty principle or the difference principle.
As for the principle of fair equality of opportunity -- well, I dunno.
I am regretting the moment in college where my friends went off and
wrote their theses about Rawls and I wrote mine about some silly
question that kind of had something to do with Jeremy Waldron.
3.
Either way, what is obvious is that Rawls anticipates situations like
the height tax -- that is, situations in which our particular moral
intuitions conflict with pre-existing general principles. As I
understand it, that's the whole point of reflective equilibrium:
we shimmy back and forth between the general moral principle and the
particular moral conundrum until there is no more shimmying to be done.
4.
So, assuming that (i) Rawls' general principles wouldn't be able to
reject a height tax and (ii) a height tax offends my moral intuitions,
how should I shimmy closer to reflective equilibrium? As I see it there
are three options here (and I think Mankiw basically lists them all in
his paper): (a) abandon the general principle; (b) modify the general
principle until it fits snugly alongside my moral intuition; and (c)
run roughshod over the goddam moral intuition and start taxing
Shaquille O'Neal like there's no tomorrow.
(I think Hanson would agree with this general set of options. The
disagreement, if there is one, is in his statement that reflective
equilibrium "will require [us] to reject some raw intuitions, and
embrace some unfashionable conclusions." My sense is that you can move
toward reflective equilibrium and remain fashionable.)
5. Anyway, with that in mind, I vote for (b). In particular, I would
tinker with the principle of fair equality of opportunity until it
included a ban on taxing biology in the name of fairness.
6. The question here is "Why?" I don't have a good answer. I fully acknowledge that I am dodging the tough question here. But does reflective equilibrium give us any guideposts for how we should shimmy, beyond reducing intuitive dissonance?
Again: I
feel that I deserve my height (which is really fairly modest) in the
same way that I imagine Greg Mankiw feels he deserves his intelligence
or his ability to work hard. Does that make me unprincipled? I dunno. All I can say to that is: "What's the alternative?" (I can
also offer a highly pretentious quote from Wittgenstein: "If I have
exhausted the justification, I have reached bedrock and my spade is
turned. Then I am inclined to say 'This is simply what I do.'"
Wittgenstein did a lot of crazy stuff, but I get his drift.)
More generally, I'm not sure Hanson should be so quick to reject the
impulse to cling to a deeply held moral intuition in the face of radical social planning. As a friend pointed out to me, this is a
fundamentally conservative impulse -- standing athwart history yelling
stop and all that. Should we embrace the radical social planning instead?





Shouldn’t the positions you arrive at be independent of their fashionable-ness?
Then again, maybe the conventional wisdown reflects moral intuitions that we don’t want to throw out. (We should give received wisdom more weight because many people have thought about the isue and come to that reasoned view).
I think I agree, but I also think this cuts in both directions: I shouldn't embrace an intuition because it's fashionable, but I shouldn't EXPECT to reject intuitions because they are fashionable, either. Maybe the search for equilibrium shouldn't consider fashionable-ness one way or the other?
Again, I am not the smartest man in the virtual room, but one difference I see: wealth re-distribution is done on the effect not the cause. If the cause is industriousness, ingenuity, prudence, the effect 'may' be higher wealth. Semantics are important because then they a corollary can be applied.
Also, is there anything in keynesian theory that would be useful to this discussion?
I've replied here.