Question

The Federal Debt Reduction Commission recently recommended that both mortgage-related subsidies and tax breaks from the federal agencies that help middle- and lower-income families buy homes be scaled back or eliminated. The Obama administration has proposed taking the latter step, eliminating Fannie Mae and Freddie Mac but doing nothing about the incentives and tax breaks that benefit wealthier taxpayers (Morgenson, 2011a; Wagner & Kravitz, 2011). Is their proposal ethical? Why or why not?

This question from "Ethical Dilemmas in the Financial Industry Katherine Russell, Megan Dortch, Rachel Gordon, and Charles Conrad"

Answer 1

The purpose of ethical conduct is to ultimately promote equity in the society and enable welfare of one and all and reduce inequality in this world. Based on the above criteria, the proposal of Federal Debt Reduction Commission to remove subsidies and tax breaks that help the lower and middle class families are grossly unjustified and it also would ultimately lead to increase in inequality and further reduce the scope for welfare of the overall society or community. Also, the subsequent actions by the Obama Administration to remove the subsidies for the economically not so well off but retaining the tax breaks for the rich only goes on to reinforce this point.

Thus the proposals were completely not justified and not ethical as well.