If government was not allowed to make interpersonal comparisons of utility, what effect would this have on how we tax people?
A) We could not tax at all.
B) We could not justify taxing the rich more than the poor.
C) We would tax the rich more than the poor.
D) Whatever tax government collects would have to be voluntarily given by the people
Taxed.
E) We could continue taxing the way we do, but it would be less efficient.

Question

Quizplus · Accepted Answer

Without the ability to make interpersonal comparisons of utility, the government would lack a justification for progressive taxation, which is based on the principle that the marginal utility of income decreases as income increases. This principle supports the idea that taxing the rich at higher rates than the poor results in a more equitable distribution of the tax burden in terms of utility or satisfaction.

If Government Was Not Allowed to Make Interpersonal Comparisons of Utility