Most people believe that marginal utility diminishes with each additional dollar of income (or one more dollar is worth more to a poor person than a rich one).

a. If that is true, how would you design an income tax that imposes an equal burden in lost utility on rich and poor households?

b. How would your answer differ if the marginal utility of income did not diminish?

c. How would your answer differ if your goal was to leave households with equal levels of utility from their last dollar of income? (Radical)