[lbo-talk] Progressive taxation vs flat tax

[andie nachgeborenen]

Yes, that's what I meant to say. But you don't have to buy the apparatus of marginal utility theory to grasp the common sense point that another dollar means less to Bill Gates than it does to me, and less to me that it does to the cleaning staff in the building. After all, in discussions with ordinary people, they are not going to go all theoretical on you. If you said "Pareto-optimal" to them their eyes would glaze over at once.

Shane Mage <shmage at pipeline.com> wrote:Justin wrote:
"Have you tried the argument from diminishing returns? (This is in 
fact the precise rationale behind progressive taxation.) The point 
being that a dollar means a lot less to someone who makes a $200,000 
a year than it does to someone who makes, say $10,000 a year..."

Didn't you mean to say diminishing marginal utility of income? This is
precisely why the great "neoclassics" Marshall and Pigou thought
of themselves as socialists--and why the co-founder of
"marginal utility" value theory, von Wieser, called his theory
"the political economy of a communist society"--and why
todays epigone economists like Samuelson and Friedman totally
reject marginal utility theory in favor of "indifference curves"
and "Pareto optimality."

Shane Mage

"When we read on a printed page the doctrine of Pythagoras that all 
things are made of numbers, it seems mystical, mystifying, even 
downright silly.

When we read on a computer screen the doctrine of Pythagoras that all 
things are made of numbers, it seems self-evidently true." (N. 
Weiner)
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