It's merely a reduction in inequality

This Article challenges the double-distortion argument from a law-and-economics perspective. In particular, the Article contends that legal rules should be used to redistribute income, in addition to taxes and transfers. Two main reasons justify this conclusion. 7 First, there is no a priori reason why a legal rule that redistributes income should always be distortionary - a necessary condition for the double-distortion argument to be true. Indeed, it is easy to devise examples where a change in legal rules will both redistribute income and increase efficiency. More generally, there is nothing inherent in the concept of redistribution that requires such a change to be accompanied by an efficiency loss. Within economics, redistribution is defined simply as a reduction in inequality. Consistent with this definition, it is possible for a redistributive legal change to be either inefficient or efficient - even in the Pareto sense, where no one is worse off and at least someone is better off. 8 Since a legal change that meets such conditions both reduces inequality and not only is nondistortionary but increases wealth, it is unambiguously superior to redistribution through the tax and transfer system, which is always distortionary. 9