Posted by Kenneth Anderson: The Declining Marginal Utility of Money http://volokh.com/archives/archive_2009_06_28-2009_07_04.shtml#1246587321
among high income taxpayers in California. The FB or Twitter tweet or similar social networking thing said something close to (I'm deliberately obscuring the identifiable bits) "willing to pay higher taxes if that's what it takes to solve the California budget crisis." This is admirable and I'm entirely certain true of said individual. Being willing to pay higher taxes is not necessarily a bad thing, just as it is not necessarily a good thing; it depends on why, what for, what society gets for it, and other things. However, I will note that - for reasons related to FOIA - this particular person's California state public sector salary for 2005 was publicly known to be in excess of $300,000 a year. Which I don't in the least begrudge; I wish I were paid that as an academic. But it does seem to me a little easier at over $300k to announce oneself willing to pay more in taxes. I never used to believe declining marginal utility theory - having a somewhat atavistic view that it wouldn't surprise me if rich people were actually made happier by each additional dollar of income, rather than becoming marginally more indifferent. Money can quite possibly buy happiness; more money can, I perversely suspect on no evidence whatever, buy more happiness. Why should it ever stop? Money just converts to power and power to converts to glory, as Hobbes or someone said (I paraphrase). If it's not one kind of end, it's another. Why should its utility decline? I have always found the proposition that its utility declines a weird sort of moralism among the theorists of economic rationality. But I do think there's something not quite right about the wealthy announcing themselves willing to pay more in taxes - reason being that, in the circumstances in California, what one is really announcing, under cover of talking about oneself, is that everyone else, including people making, say, a respectable, but not extraordinary 100k a year, should also be paying more taxes, and if they're not willing to, there is impliedly something slightly antisocial about them. Or at least less sociable than the rich(er) person willing to pay more. Maybe that's being unfair, and this is purely an invitation to altruism among the rich - but it seems to me more likely, given the nature of where the money would have to come from to make a difference, absent serious spending cuts, that it is actual a kind of sacrifice-bunt to call for extracting money from people less well-off than oneself. My kid, who is very, very attuned to such things, would probably say that this kind of announcement is best understood not as declining marginal utility, but ... passive aggression. _______________________________________________ Volokh mailing list Volokh@lists.powerblogs.com http://lists.powerblogs.com/cgi-bin/mailman/listinfo/volokh
