My Taxes Are Too Darn High: Why Do Households Protest Their Taxes?

Abstract

In the United States and many other countries, taxpayers can file a protest to legally reduce their property taxes. While tax protests can provide a unique opportunity to study the (un)willingness to pay taxes, they have received little attention from researchers. To fill that gap, we study what motivates households to protest their property taxes. Using a field experiment, we show that filing frictions and fairness considerations play significant roles. In comparison, partisan identity plays a minor role. We calculate the magnitude of filing frictions and willingness to pay for fairness using a money metric. To do so, we combine our experimental estimates with quasi-experimental evidence on the role of expected tax savings. Last, we discuss how low-cost interventions targeted at disadvantaged groups can mitigate existing economic and racial disparities in the system of tax appeals.

Keywords: taxes, protest, appeal, preferences for redistribution, conditional cooperation

JEL Classification: C93, H26, K34, K42, Z13