Tax Designs and Tax Attitudes

Abstract

The watchword of the policy feedbacks approach to political analysis - that politics shapes policy - suggests that the way in which taxes are designed may influence how the public feels about various levies: their support for those taxes, their perceptions of fairness, and their willingness to pay them. Hypotheses about the design features of different taxes Americans pay, including tax regressivity or progressivity, the manner in which they are exacted, their actual and perceived costs, and the visibility and desirability of resulting benefits, are examined with closed- and open-ended survey data. Taxes with more attractive design features are generally more positively perceived by the public. Open-ended responses help explain the fairness perceptions and popularity of several taxes, including a widespread belief that estate taxes constitute “double taxation” and the considerable embrace of the notion that “everyone pays” state sales tax (as opposed to the federal income tax, where some rich and poor people “get away” without paying). These results help explain why some taxes invite more ire than others.