Document Type


Publication Title

Tax Law Review

Publication Date



This article questions the normative power of the optimal tax model by examining assumptions made by the developer of that model, James Mirrlees' . It makes a case for moving beyond utilitarian conceptions of social welfare that are at the foundation of the optimal tax model, and that have become the dominant construct in tax policy analysis. In explaining why the Mirrlees assumptions are problematic, the Article argues for a nuanced, philosophical understanding of fairness that incorporates the role of taxation into a broader conception of a just society. A fair tax must satisfy the full range of demands that a just society places on government exercising its coercive power over individuals. Applying that philosophical approach to tax fairness reveals significant deficiencies in the assumption that a tax on ability to earn is truly optimal as a matter of justice. The Article proceeds as follows. The next Part explores why the Mirrlees ideal is attractive to economists, and expresses skepticism about the economic analysis on its own terms. Part III introduces the legal literature and describes why ability taxation has been attractive to those who care about fairness in taxation. It shifts the focus to fairness in political theory, contending that fairness in taxation must be understood as a conception of equality." It critiques endowment taxation as an ideal on those terms, arguing that endowment tells us much less about inequality among individuals than we might hope; the proponents of ability taxation have misunderstood the nature of liberty and equality essential to liberal egalitarian political theory. The Article concludes by considering why the discussion about inequality in taxation has focused on human endowment rather than financial endowment, and suggests a way forward for breaking out of the utilitarian mold and using a philosophical conception of fairness more broadly in thinking about justice in taxation.