Document Type


Publication Date



equity, consumption tax, income averaging, tax policy

Subject Category

Law | Taxation-Federal Income


Tax policy analysts often claim that tax distributional analysis should be based on a lifetime perspective, at least as a theoretical ideal. A prominent argument in favor of a consumption tax base over an income tax base appeals to this lifetime equity perspective, as does the argument for lifetime income averaging under an income tax with progressive marginal rates. These appeals to lifetime equity assume, in most cases without discussion, that personal identity over time is an unproblematic concept, so that the whole-life person is clearly the ideal unit for purposes of distributional analysis. However, the philosopher Derek Parfit claims that personal identity is not stable over time; to Parfit there is an important sense in which a person today is not the same person he was several decades ago. To one who is persuaded by Parfit’s view, the merits of the whole-life approach to tax equity analysis will be far from clear. This article describes Parfit’s account of the nature of personal identity over time, and considers how tax policy analysis changes if one takes the Parfitian view rather than the standard view of personal identity. The article concludes that the arguments for consumption taxation (in preference to income taxation) and for lifetime averaging are much weaker under Parfit’s account of personal identity, and that age-sensitive taxation (e.g., different tax rate schedules for taxpayers of different ages) becomes more attractive under Parfit’s account.