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

160 Pages Posted: 2 Nov 2020 Last revised: 9 Oct 2021

See all articles by Brad Nathan

Brad Nathan

The University of Texas at Dallas - Naveen Jindal School of Management

Ricardo Perez-Truglia

University of California, Berkeley; National Bureau of Economic Research (NBER)

Alejandro Zentner

The University of Texas at Dallas - Naveen Jindal School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: September 12, 2020

Abstract

In the United States and many other countries, taxpayers can file a protest to legally reduce their property taxes. Despite the widespread use of tax protests, there is little research on them. To fill this gap, we use administrative records and two sources of causal identification: a quasi-experiment and a large-scale natural field experiment. We document three key factors explaining why some individuals file protests while others do not: expected tax savings, filing frictions, and fairness considerations. On the contrary, we show that partisanship is not a significant factor. We calculate the willingness to pay for fairness and the magnitude of filing frictions using a money metric. Last, we discuss policy implications for a more equitable system of tax appeals.

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

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

Suggested Citation

Nathan, Brad and Perez-Truglia, Ricardo and Zentner, Alejandro, My Taxes Are Too Darn High: Why Do Households Protest Their Taxes? (September 12, 2020). Available at SSRN: https://ssrn.com/abstract=3691361 or http://dx.doi.org/10.2139/ssrn.3691361

Brad Nathan

The University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Ricardo Perez-Truglia (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alejandro Zentner

The University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

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