Henry Simons's view on distributive justice and its accomplishment through the system of progressive taxation was articulated almost seventy years ago and is not grounded in the ability to pay or benefit principles.
According to the first, known as the benefit principle, different citizens receive different levels of benefits from the state and the burden of funding government expenditures should be distributed among taxpayers according to the level of benefits received.
Originating in the discourse of political thought, the benefit principle suggests that governors obtain control over their subjects as a result of mutually beneficial relationships between themselves and those to be governed.
Although the benefit principle has some intuitive appeal, it features two main flaws.
The benefit principle was most influential in tax theory during the eighteenth century, but shortly after it lost much of its power, mainly as a result of critiques such as that of Mill.
In reaction to the debate over the soundness of the benefit principle of taxation, by the middle of the nineteenth century a new line of thinking arose in the area of tax analysis, evolving into what is known today as the principle of "ability to pay" (also called "faculty" or "sacrifice" principle).
Second, he explores ideas of property, contract, harm and benefit principles
, and remedies against harm "at the margin," - those blurry realms where boundaries are fuzzy, coordination and holdout problems are great, and Adam Smith's "invisible hand" is weak.