I am a student of econometrics and I'm studying the philosophy of economics. This week I have exams, and I was reviewing last year's exam to practice. I ran into this question:
One of the arguments for a 'flat tax' system instead of the current Dutch progressive system is that such a tax contributes to the welfare of The Netherlands, because there is a direct relation between someone's contributions and his net reward. This argument reflects the following principle:
a. Principle of equal opportunity
b. The difference principle
c. Capitalist justice
I was convinced that the answer should be capitalist justice, with the reasoning that its definition is: 'Everybody should be rewarded equally to their productivity, effort or contribution'.
However the correct answer according to the book is D, without any explanation given. I don't see how this can be, because utilitarianism's definition is 'that aggregated utility should be maximized'. The argument indeed states something about welfare, but I don't see why this should be the right answer.
Can someone explain this to me before my test? Thanks a lot in advance.