What makes a policy progressive or regressive?
I wrote something a while ago about why I think forgiving all student debt is neither a good idea nor progressive. One of the common responses to people who make the kinds of argument that I make is that, indeed, forgiving student debt is progressive, because, at least on the plan Sanders had, it would be paid for by a tax on speculative trades. So, it is progressive because it redistributes down. After I saw that objection several times I realized that I didnt have a well-formed concept of progressivity or regressivity, and didnt really know what other people meant by it. So Im asking you to do either or both: help me understand what progressive means, and/or understand why it matters that some policy is progressive. To be clear. I agree that, if paid for the way Sanders planned to pay for it, loan forgiveness would have the net effect of redistributing down. Now, that doesnt impress me a huge amount. Imagine a proposal that redistributed down from the top 1% just to the next 9%, and does nothing for the bottom 90%. Sure, that redistributes down, but the population within which it redistributes isnt really of interest to me for now. The definition of progressive on which the transfer from the top 1% to the next 9% is progressive is:  A policy is progressive as long as it has the net effect of redistributing resources downward at all. Thats clearly not the definition underlying my objection to student debt forgiveness being progressive. (As I say, I just didnt have a clear idea of what definition was in my head, but it wasnt this one). Heres a second possible definition:  A policy is progressive as long as it has the net effect of reducing inequality of resources in the whole population  These two definitions may look equivalent, but I dont think they are. Its just not clear to me that redistributing from the 1% to the next 9%, even though it redistributes down, reduces inequality in the whole population. [1] It reduces inequality within the top 10%, but leaves inequality in the whole population untouched. Similarly redistribution downward, or upward, within the bottom decile. Or within any decile or quintile (except the middle quintile). Im not committed to this claim, just saying how it seems to me. Suppose that you had a policy that reduced inequality in the population by shifting resources from the top 1% to everyone in the top 55% of the income distribution. That, I think, would count as reducing inequality in the whole population. So it would be progressive on both the above definitions, even though it doesnt touch the bottom 45% of the distribution. In this post about student debt forgiveness at Brookings, the authors say the following:  We measure regressivity in relationship to income (or wealth), not to raw dollar amount. The latter metric would mean that Social Security is a regressive social program since it pays out higher benefits to higher-income beneficiaries That is why the claim that student debt cancellation is regressive is false. We measure regressivity in relationship to income (or wealth), not to raw dollar amount. The latter metric would mean that Social Security is a regressive social program since it pays out higher benefits to higher-income beneficiaries Of course, Social Security is widely and correctly credited as the federal program that does the most to reduce poverty Because loan balances as a share of income are highest for lower-income borrowersand so much higher as to be negative for low-wealth borrowers (many of whom have negative balance sheets thanks to student debt)cancelling student debt would make the income and wealth distributions more egalitarian and nearly eliminate negative net worth households from the wealth distribution. That is the definition of a progressivenot regressiveprogram. I dont understand the first sentence of that passage (any help would be welcome). But the rest of the passage suggest two different, non-equivalent, definition of progressivity. First, the final two sentences suggest this definition:  A policy is progressive as long as it has the net effect of increasing the resources of the bottom X%  Ive used X because I am not sure what percentage they have in mind, and because you could reasonably argue for any of a number many possible values  at least any value under 35 in the US context. But you can see, I think, how it is different from the first two definitions  a policy could redistribute down, and reduce inequality in the population as a whole, without doing anything for the bottom X%. The second definition, suggested (to me) by the first half of the passage, is this:  A policy is progressive as long as it reduces the ratio of resources between the top and the bottom. Just to be clear, hooray for increasing resources for the bottom, and for reducing the ratios. But neither is the definition of progressive that Ive been carrying around in my head. Consider the following example. Suppose group A has average wealth of $1000, and group B has average wealth of $10,000. If you gave everyone in the A $1000, but gave everyone in B $5000, you would double the wealth of group A, but would only increase the wealth of group B by 50%. So you have, indeed, increased the resources of the bottom group, and you have reduced the ratio from 1:10 to 1:7.5. This redistributes down, decreases inequality, and increases the resources of the worst off group. But, still, I am reluctant to call the measure progressive. Im certainly reluctant to celebrate it, even in those cases in which, in fact, it really is the best we can do. I think that the reason I baulked at people claiming that debt relief is progressive, and similarly baulk at claims that free public college is progressive, is that I had in the back of my mind (really, quite far in the back of my mind) something like the following definition:  A policy is progressive as long as it reduces the ratio of resources between the more and the less advantaged, and does not increase the absolute gap in resources between them. That means flat rate equal transfers are the starting point: they are the minimum expectation for progressivity (because they reduce ratios without increasing absolute gaps). I think that is exactly the standard for progressivity that I have been carrying around in my head, and which makes me baulk at calling policies like free public college or student debt relief progressive. (Though, I have never before been able to articulate it). This still leaves open the possibility that policies that reduce ratios and increase absolute gaps might sometimes be all-things-considered improvements on the status quo. And if that really were the best we could do in some circumstance we might be justified in doing it. But we wouldnt flatter it with the term progressive. Of course, in the end, progressive can mean whatever you want it to mean  but, as with lots of other concepts, it helps to know what you mean by it, and know what other people mean by it (I mean that as a self-criticism). Maybe think of it this way: the fifth definition sets a standard for celebrating a redistributive policy. If it doesnt do that, you still might endorse it if its the best you can do. But youll look even harder for alternatives that do better than you normally would. [1] This is partly because Im not sure what I mean by inequality in the whole population. It could be interpreted a number of different ways. Give it whatever you think the most plausible interpretation is.