My Taxes are Too Darn High: Tax Protests as Revealed Preferences for Redistribution

Abstract

In all U.S. states, individuals can file a protest with the goal of legally reducing their property taxes. This choice provides a unique opportunity to study revealed preferences for redistribution. We study the motives driving tax protests through two sources of causal identification: a quasi-experiment and a pre-registered large-scale natural field experiment. We show that, consistent with selfish motives, households are highly elastic to their private benefits and private costs from protesting. We also find that social preferences are a significant motive: consistent with conditional cooperation, households are willing to pay higher tax rates if they perceive that others pay high tax rates. Lastly, we document significant differences between the motivations of Democrats and Republicans.

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

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