John Stuart Mill's philosophy followed the doctrines of his father James Mill and his father's mentor and compatriate, Jeremy Bentham. John was raised from birth by his father for the primary purpose of progressing the utilitarian theories which both he and Bentham ascribed. Utilitarianism is an ethical theory holding that the right course of action is the one that maximises the overall "good". Bentham’s work on utilitarianism was foundational for the work which was done by Mills. The utilitarianism philosophy argued that the right act or policy was that which would cause the greatest good for the greatest number of people also known as the greatest happiness principle, or the principle of utility.
Premise: Equity vs. Equality
Equity is the state, quality, or ideal of being just, impartial, and fair. Equality is the state, quality or ideal of being equal.
Fair Price and Taxation
Based on the concept of “Equality of Sacrifice”, Mills believed that people will perceive taxes to be fair, so long as they were being applied equally to all members of society. He saw progressive taxation as a “mild form of robbery” as it penalized those who worked harder in accruing more wealth. As marketers, we view taxation as being an intense, emotional issue, which should be treated delicately, as it affects all segments of the population. Hence, in situations where public interest is threatened, the price must be determined on the basis of equity, not equality. A progressive taxation rate refers to the manner in which taxation progresses with higher incomes. Income earners are indebted to pay a proportionately higher taxation “price” on the amount they earn as incomes increases. A progressive taxation rate therefore reduces the tax burden on poorer members of society, as the burden is shifted to those with a higher ability to pay. Progressive taxation hence has a distribution effect on income. Developing nations, like our own, spend a considerable fraction of the national budget on roads, schools, infrastructure, poverty alleviation and other areas that promote progress. It is evident then, that there would be no possible way to raise the annual budget if economies operate on an equal taxation base. In order to prevent a budget deficit from occurring, fewer revenues would have to be channelled toward developmental initiatives and welfare benefits (URP, CEPEP, and Social Welfare). This would further place deprived members of society in an even more vulnerable state. As such, the absence of the distribution effect of income causes greater disparities in income allocation. This situation may potentially lead to the erosion of the middle class, with the creation of a very large upper and lower class. Hence, we deduce that an equal price may not always be a fair price, particularly in matters of social reform. Mills further postulates the concept of individualism. The main contention of individualism is that each man should enjoy the benefits of his own production. What Mills fails include however, is that people are born and bred under particular situations which render them unequal in their ability to progress. A person born under unfavourable circumstances such as poverty, may not be as able to acquire the level of education and advancement as a person with the financial means to do so. As such, he ignores that individuals are a victim of circumstance. Owing to detrimental circumstances, not every member of society can adequately seek his own interest. Furthermore, those ravished with poverty are unable to progress, particularly because the revenue generating assets are in the hands of the rich. We are therefore of the belief that an equal taxation “price” leads to an uneven distribution of income which renders the poor helpless, and fuels the vicious cycle of poverty. For developing nations like our own, the focus of price setting and policy makers should be cantered on...