For those of you looking for good reasons to support progressive taxation (note that is different than asking one group to pay more, we are asking them to pay more than more), I would suggest you stay away from the idea that “a dollar is worth more to a poor person than a rich person.” For starters, recent research by Justin Wolfers and Betsey Stevenson have found that consumption does not seem to reach a satiation point as previously thought. But on the philosophical side – if you want to argue that income can be transferred because it means more to one group than another … well … then there is nothing grounding that argument.
What do I mean by that?
Well, such an argument leaves itself open to the following simple line of attack: “rich people like dollars more than poor people, that’s why they’re rich.” And taken to a Nietszchean extreme would leave us with the opposite conclusion – that the only moral way to deal with income is to take it from the poor and send it to the rich, or perhaps just to the richest, money hungriest person out there. Methinks we want to avoid such conclusions.
UPDATED: on 10/2 at 9:29pm to add link to the Wolfers and Stevenson paper.