4 ms·
Logarithmic utility of money implies that the last X% of your income is worth the same amount of utility, regardless of what your income is: log(x) - log[(1 - r
by evanpw 11y ago
Logarithmic utility of money implies that the last X% of your income is worth the same amount of utility, regardless of what your income is: log(x) - log[(1 - r)x] = log(x) - log(1 - r) - log(x) = -log(1 - r). But "does the same harm to every person" is not necessarily the right definition of "fair" in the context of taxes, though.
- tunesmith 11y agoCan you expand on that? What is x, what is r? And you are saying that the last 5% of a millionaire's income has the same utility as the last 5% of a different person's income that makes 25k/year?