Progressive Taxation and the Distribution of Freedom

Freedom of choice in consumption activity can be represented by opportunity sets that are bounded by both budget and time constraints. I argue that, in a society in which income is distributed more unequally than leisure time, a government aiming at leaving freedom distribution unaltered should apply progressive taxation. Since incomes bind freedom only partially when this is bound by time constraints, taxing the rich reduces her/his freedom proportionally less than the reduction in freedom caused by taxation of the poor. The degree of tax progressiveness will be higher if the government aims at redistributing freedom from the rich to the poor.