Fairness and the proportionality principle

How should income be distributed in a way that respects both the egalitarianideal that inequalities due to differences in opportunities should be eliminated andthe liberal ideal that people should be free to pursue their own idea of the goodlife without interference from society? We show that reasonable interpretations ofthe egalitarian and the liberal ideal characterize what we refer to as the generalizedproportionality principle. This principle states that an individual should have the shareof total income that he or she would have had if everyone had the same opportunitiesand these opportunities were given by the average of the pre-tax income functions of allindividuals in society. We argue that a redistribution mechanism based on this principlewould eliminate unfair inequalities and preserve fair inequalities, and discuss whenthe generalized proportionality principle is equivalent to the simple proportionalityprinciple.