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

52 Pages Posted: 14 Sep 2020

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 2020

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 preferences for redistribution via revealed preference. 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 too. Lastly, we document significant differences between the motivations of Democrats and Republicans.

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Suggested Citation

Nathan, Brad and Perez-Truglia, Ricardo and Zentner, Alejandro, My Taxes are Too Darn High: Tax Protests as Revealed Preferences for Redistribution (September 2020). NBER Working Paper No. w27816, Available at SSRN: https://ssrn.com/abstract=3692172

Brad Nathan (Contact Author)

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

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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