Popular Acceptance of Inequality Due to Innate Brute Luck and Support for Classical Benefit-based Taxation

Matthew C. Weinzierl

Abstract

U.S. survey respondents' views on distributive justice differ in two specific, related ways from what is conventionally assumed in modern optimal tax research. When expressing their preferences over allocations in stylized, hypothetical scenarios meant to isolate key features of the tax problem, a large share of respondents resist the full equalization of unequal outcomes due to innate brute luck that standard analyses recommend. A similar share prefer a classical benefit-based logic for taxes over the conventional logic of diminishing marginal social welfare. Moreover, these two views are linked: respondents who more strongly resist equalization are more likely to prefer the classical benefit-based principle. Though the Amazon Mechanical Turk survey population is not a representative sample of the U.S. population, robustness of these results across demographic traits and political views suggests that a large share of the American public holds views inconsistent with standard welfarist objectives.

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Case | HBS Case Collection | February 2014 (Revised October 2019)

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Taxing corporations is popular, but why? Corporations do not bear the burden of taxes, people do, and the incidence of the corporate income tax burden is likely to be far different from what many of its supporters assume.
Instructors may also obtain a Teaching Note, written by this case's author, that provides suggestions for using this case effectively in the classroom.

Keywords: Economic versus statutory incidence; Basics of corporate taxation; Business Ventures; Taxation; Profit;

Citation:
Weinzierl, Matthew, Katrina Flanagan, and Michael Cianellli. "Should Corporate Profits Be Taxed? (A)." Harvard Business School Case 714-033, February 2014. (Revised October 2019.) View Details

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Supplement | HBS Case Collection | October 2019

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Weinzierl, Matthew C., and Michael Cianelli. "Should Corporate Profits Be Taxed? (B)." Harvard Business School Supplement 720-015, October 2019. View Details

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Case | HBS Case Collection | February 2015 (Revised August 2019)

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Equality of opportunity is endorsed universally even though, or more likely because, it can mean such different things to different people. What definition of equality of opportunity ought to figure into policy decisions? How close, or far, is the United States from providing equal opportunity?
Instructors may also obtain a Teaching Note, written by this case's author, that provides suggestions for using this case effectively in the classroom.

Keywords: equality of opportunity; justice; Opportunities; Equality and Inequality; Policy; United States;

Citation:
Weinzierl, Matthew, and Alastair Su. "Equality of Opportunity and Outcome in the U.S." Harvard Business School Case 715-028, February 2015. (Revised August 2019.) View Details

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Popular Acceptance of Inequality Due to Innate Brute Luck and Support for Classical Benefit-based Taxation

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