Kanbur, Ravi
Tuomala, Matti
Charitable Conservatism, Poverty Radicalism and Good Old Fashioned Inequality Aversion
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Financial Economics
Public Economics
2010
2010
In his Presidential Address to the European Economic Association, Tony Atkinson
introduced the idea of a “Charitable Conservatism” position in public policy, which
“exhibits a degree of concern for the poor, but this is the limit of the redistributional
concern and there is indifference with respect to transfers above the poverty line.” This
contrasts with the perspective of poverty indices, which give zero weight to those above the
poverty line, which we call “Poverty Radicalism,” and with standard “Inequality Aversion”
where the weights decline smoothly as we move up the income scale. The object of this
paper is, first, to clarify the interrelationships between Charitable Conservatism, Poverty
Radicalism and Inequality Aversion. We do this by showing how the patterns of welfare
weights to which each of these gives rise are related to each other. Secondly, we are
concerned to demonstrate the implications of these different views for optimal income
taxation. In terms of levels and patterns of marginal tax rates, we show that Charitable
Conservatism and Poverty Radicalism are on a continuum, and by choice of low or high
Inequality Aversion one can approximate either outcome fairly well.
Working or Discussion Paper