have a claim to the good derived solely from the act of creation. Thus,
welfarist theories of distributive justice permit taxation either to finance
public goods or to redistribute income, if the well-being of individuals in the
society is thereby improved.
An understanding of the implications of welfarist theories of distributive
justice for the tax structure should be understood. We focus on welfarist
rather than entitlement theories, in part because we believe that such ethics,
while not without problems, have more to commend them. It seems plausible, at
least, to judge government policies by the impact those policies have on the
welfare of the individuals in the society.
One particularly attractive feature of a welfarist analysis of taxation is its
responsiveness to the efficiency effects of various tax structures –effects
that nearly everyone finds relevant. Welfarist theories view as desirable any
change that makes some member of society better off without making any other
member worse off. Entitlement theories, on the other hand, may not endorse a
tax that increases the welfare of an "undeserving" individual even if that
change does not reduce the welfare of any other person. While it may be
possible to formulate a coherent ethical theory that rejects the this,
acceptance of this principle is frequently considered a prerequisite of any
acceptable social decision making rule.
A final reason for othe focus on welfarist theories is that entitlement
theories do not clearly justify any rate structure. Any tax imposed on an
unwilling taxpayer may be inconsistent with a system based on the view that a
person has a right to what he produces. Under such an entitlement theory, a
state might be permitted only to levy taxes that lead to making every member of
the society as well off or better off than she was before the tax. For example,
compulsory taxation might be justified to maintain a government strong enough
to protect the rights of the individuals living under it. Even if this notion
is accepted, however, it provides little guidance as to the appropriate rate
structure. The tax implications of welfarist ethics have been explored in the
important economics literature on "optimal taxation."
Welfarist ethics are not without their own difficulties, however. Many reject
such theories because they do not value rights except to the extent that they
improve the welfare of individuals. Others find the interpersonal comparisons
of utility required by welfarist theories to be not only difficult to make, as
most supporters of welfarism would admit, but also meaningless.
The rejection of an exclusively welfarist ethic does not necessarily imply
acceptance of an ethic that is exclusively entitlement-based. Conceivably, a
just society could consider both the welfare of individuals and entitlements in
determining a fair system of distribution. Optimal taxation analysis should be
of interest to those who believe in a mixed ethic, since it provides insight
into the tax structure inspired by any theory of distributive justice that is
at least partly concerned with individual welfare. Ultimately it is the duty of
society to see how the redistributive features of various progressive rate
structures comport with a wide variety of welfarist ethics, ranging from
utilitarianism to the Rawlsian leximin, in order to discover the best structure
for the society in which we live.
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