Taxation behind the veil of ignorance

Springer Science and Business Media LLC - Tập 60 - Trang 165-181 - 2021
Biung-Ghi Ju1, Juan D. Moreno-Ternero2
1Department of Economics, Seoul National University, Seoul, South Korea
2Department of Economics, Universidad Pablo de Olavide, Seville, Spain

Tóm tắt

We explore the design of impartial tax schemes in a simple setup where agents’ incomes are completely determined by their inborn talents. Building on Harsanyi’s veil-of-ignorance approach, we conceptualize an impartial observer who chooses a tax scheme without knowing her own preferences and the distribution of talents, and whose vNM preferences behind the veil obey Harsanyi’s principle of acceptance and are independent, in terms of utility-scale, of the distribution of talents. Our results in the resulting framework provide three main messages: (i) the veil of ignorance implies anonymity of tax schemes; (ii) the veil of ignorance generically rejects utilitarian tax schemes; (iii) the veil of ignorance endorses the (Rawlsian) leveling tax scheme.

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