<blockquote>
<p>What is the scientific explanation?</p>
</blockquote>
<p>There is no scientific explanation for any sentence that has <strong>should</strong> or <strong>ought</strong>. Such worlds imply normative value judgements. Science, properly done, is value free and hence science itself can never tell you what <em>should</em> or <em>ought</em> to be done in any situation.</p>
<blockquote>
<p>Doesn't this demotivate society?</p>
</blockquote>
<p>Depends what exactly you mean by demotivation. It is well established non-linear income taxes distort peoples optimal labor supply, educational demand choices (e.g. see Hindriks and Myles Intermediate Public Economics Ch 16). This does not always lead to less work being done since negative income effect might cause some people to work more but it does generally lead to loss of welfare of individuals. However, if under prevailing political ideology social weights are put on redistribution, this would be simply viewed as justified cost.</p>
<blockquote>
<p>For example, if a highly skilled person has to pay a high income just because they earn more with their skills (education background), doesn't it unfair to have a higher tax rate for hardly owned income?</p>
</blockquote>
<p>This is not an economic question but moral one. Under Rawlsian Max-Min principle it is not unfair at all, under Nozickian “entitlement” theory of justice such taxation would be unfair if the money was legitimately acquired through voluntary exchange of labor for money. However, this is not an economic question so I will stop here you can ask for larger discussion at some site dedicated to moral philosophy.</p>
<blockquote>
<p>How do you explain to a layman &quot;Why the rich should pay more taxes?&quot;</p>
</blockquote>
<p>Again there is no economic/scientific reason why they should. If government adopts some moral philosophy or ideology such as Rawlsian Max-Min, then it becomes optimal for government to tax people with higher incomes more.</p>
<p>Different ideologies imply different social welfare function, and optimal tax systems are such tax systems that maximize some social welfare function. However, scientifically no welfare function is better than other and there are welfare functions under which no-redistribution occurs. For example social welfare function that treats everyone equally in terms of welfare weight will result in no redistribution of income at all. Max-Min social welfare function that only assigns welfare weights to the poor will result in larger amounts of redistribution, utilitarian social welfare function that assigns people welfare weight according to marginal utility of money will end up usually somewhere in the middle. There is no scientific way to say whether Max-Min is better than utilitarian social welfare function.</p>

CC BY-SA 4.0
2023-03-30T06:25:23.537Z
2023-03-30T06:25:23.537Z
1muflon1
<p>How do you explain to a layman &quot;Why the rich should pay more taxes?&quot;.
For example, if a highly skilled person has to pay a high income just because they earn more with their skills (education background), doesn't it unfair to have a higher tax rate for hardly owned income?
Doesn't this demotivate society?
What is the scientific explanation?
Below is an example from Australian Tax rates.</p>
<p><a href="https://i.sstatic.net/udQ0x.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/udQ0x.png" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2023-03-30T11:54:55.227Z
Very much in agreement with @1mulfon1's points regarding an absence of settled opinion. Many schools of thought diverge on this topic. However, neoclassical economics does identify as a scientific worldview. And it's also such a powerful/hegemonic set of ideas, people now use neoclassical economics in everyday language, never mind policymaking. So, in terms of neoclassical economics, here is the core idea: https://dash.harvard.edu/bitstream/handle/1/12027853/SSRN-id463241.pdf?sequence=1&isAllowed=y
EB3112
<macroeconomics><taxation>
How do you explain to a layman Why the rich should pay more taxes or or high income?
Dendrobium
# How do you explain to a layman Why the rich should pay more taxes or or high income?

(Asked by: username_0 on 2023-03-30)

How do you explain to a layman "Why the rich should pay more taxes?".
For example, if a highly skilled person has to pay a high income just because they earn more with their skills (education background), doesn't it unfair to have a higher tax rate for hardly owned income?
Doesn't this demotivate society?
What is the scientific explanation?
Below is an example from Australian Tax rates.

[![enter image description here](https://i.sstatic.net/udQ0x.png)](https://i.sstatic.net/udQ0x.png)

**Tags:** macroeconomics, taxation

> **Comments:**
> **username_1**: Very much in agreement with @1mulfon1's points regarding an absence of settled opinion. Many schools of thought diverge on this topic. However, neoclassical economics does identify as a scientific worldview. And it's also such a powerful/hegemonic set of ideas, people now use neoclassical economics in everyday language, never mind policymaking. So, in terms of neoclassical economics, here is the core idea: https://dash.harvard.edu/bitstream/handle/1/12027853/SSRN-id463241.pdf?sequence=1&isAllowed=y  

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## 1 answers

### Answer by username_2 on 2023-03-30. Score: 2

> What is the scientific explanation?

There is no scientific explanation for any sentence that has **should** or **ought**. Such worlds imply normative value judgements. Science, properly done, is value free and hence science itself can never tell you what *should* or *ought* to be done in any situation.

> Doesn't this demotivate society?

Depends what exactly you mean by demotivation. It is well established non-linear income taxes distort peoples optimal labor supply, educational demand choices (e.g. see Hindriks and Myles Intermediate Public Economics Ch 16). This does not always lead to less work being done since negative income effect might cause some people to work more but it does generally lead to loss of welfare of individuals. However, if under prevailing political ideology social weights are put on redistribution, this would be simply viewed as justified cost.

> For example, if a highly skilled person has to pay a high income just because they earn more with their skills (education background), doesn't it unfair to have a higher tax rate for hardly owned income?

This is not an economic question but moral one. Under Rawlsian Max-Min principle it is not unfair at all, under Nozickian “entitlement” theory of justice such taxation would be unfair if the money was legitimately acquired through voluntary exchange of labor for money. However, this is not an economic question so I will stop here you can ask for larger discussion at some site dedicated to moral philosophy.

> How do you explain to a layman "Why the rich should pay more taxes?"

Again there is no economic/scientific reason why they should. If government adopts some moral philosophy or ideology such as Rawlsian Max-Min, then it becomes optimal for government to tax people with higher incomes more.

Different ideologies imply different social welfare function, and optimal tax systems are such tax systems that maximize some social welfare function. However, scientifically no welfare function is better than other and there are welfare functions under which no-redistribution occurs. For example social welfare function that treats everyone equally in terms of welfare weight will result in no redistribution of income at all. Max-Min social welfare function that only assigns welfare weights to the poor will result in larger amounts of redistribution, utilitarian social welfare function that assigns people welfare weight according to marginal utility of money will end up usually somewhere in the middle. There is no scientific way to say whether Max-Min is better than utilitarian social welfare function.


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