Hi Scott. Much of what you say is fair comment — and the point about the difficulty in comparing utility between one person and another will be familiar to most economists, of course.
On your first point, however, you write:
“This question distorts reality by going to extremes.”
But this seems to be an unjustified claim. Everyday, money is taken off of millionaires in order to prevent other people starving to death. And many real people do starve to death or die from malnutrition, when this might have been prevented had more money been taken from millionaires. These hardly seem like unreasonable or extreme claims to me.
Furthermore, my question was in response to this claim:
“Whatever benefits accrue around Paul will be at least matched by harm around Peter.”
If reality was being distorted, I suggest the distortion may have occurred at the point this claim was made.