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by mbay 2152 days ago
marginal utility is much higher for the government (and the public) than for you
1 comments

I think that statement is backwards.

Are you asserting that the government (and the public) will get more utility (benefit) from the extra 1 dollar on its $2.7 billion budget (increase of .000 000 04 percent), than I would from the extra dollar in my net annual income (on the order of a thousandth of a percent)?

That's a pretty incredible contention.

On a per-dollar basis, you indeed get more marginal utility from the extra dollar than the government would.

But on a percentage basis (in a progressive taxation scheme, and especially in the higher tax brackets) the government gets more marginal utility from a 1% tax increase than you would from a 1% tax break.

Nope.

In any bracket and at any percentage, the government will be adding $x to it's huge budget by taking $x from an individual or organization's much smaller budget.

(* Note that it really isn't valid to compare marginal utility between entities. It's an individual, relative measure, rather than an absolute quantity.)