In the United States, we have a graduated or progressive federal income tax. This means that the more money a person makes, the greater the percentage they will pay of income tax. One of the main intellectual defenses for the graduated tax is that it is fair because those who make more money pay a higher percentage of their income in taxes, and value each dollar of their income less than those who don't make as much. Thus, it would seem reasonable that the rich would pay a greater percentage than the poor. However, that is poor economic reasoning. This argument does not take into account the utility of each extra dollar for the rich versus the poor. John D. Rockefeller, the richest man in the world in his day was asked how much money was enough for him. His response was "A little bit more." This shows that a person's wealth is not indicative of their marginal utility for their next dollar. As a result, one cannot assume another's preferences and utility rates simply based on their wealth.
Instead of advocating for the graduated income tax, those who want everyone to "pay their fair share" should push the federal government to revert to a flat tax, where everyone is taxed at the same rate. Although a situation where everyone told the government their marginal utility for each dollar would be most desirable, in reality, it is not practical, which is why a flat tax is the best option. The rich will still have to pay more than those with less money but will pay the same percentage of their income in taxes.
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