In the preface, Williamson states that she is regularly told that “Americans hate taxes … [and] are angry … and intrinsically anti-government.” But this, she says
has become a truism without the benefit of being true…. To be a taxpayer, Americans believe, is something to be proud of. It is evidence that one is a responsible, contributing, and upstanding member of society, a person worthy of respect.
She offers preliminary support for this belief by citing political scientists who have “reviewed decades of survey data to conclude that a majority of Americans, including a majority of Republicans and the affluent, not only favor ‘concrete government programs targeted to jobs and wages, educational opportunity, and protections against illness and deprivation’ but would be willing to pay higher taxes to fund these efforts.”
The book’s introduction continues with background on American attitudes toward taxation and the connection Americans feel between paying taxes and their place in the community. She also discusses how she acquired the primary support for her case from open-ended interviews with 49 Americans plus an independent survey of another 1,000, both from diverse samples.
In this review I will try to give a representative summary of the many comments by Williamson’s interviewees and her discussion of those comments. Let me say upfront that I see little indication that the people she interviewed or who responded to the survey are proud to pay taxes. Indeed, she deserves credit for putting in plenty of evidence inconsistent with her thesis of taxpayer pride. But she seems resistant to seeing such evidence as undermining her argument.
For example, she dismisses anti-tax attitudes as reflecting personal flaws by saying they “are often tied to anger that minority groups might benefit from public spending.” Also, after stating that “the paperwork [required to pay income taxes] is extremely arduous,” she makes the bizarre argument that
there are reasons to think that an arduous taxpaying process is a good thing. It might encourage taxpayers to think what government provides. To the extent that the income tax awakens Americans’ sense of connection to their government, its inconvenience may be a price worth paying.
I accept the accuracy of the survey indicating that people say they are willing to pay higher taxes for government programs, and I accept that this could indicate pride in paying taxes. But I do so with a caveat: public choice economists have pointed out that many voters are motivated to vote for paying higher taxes because it allows them to feel proud of themselves at effectively zero cost. The reason for the miniscule cost is that the probability that an individual vote will determine an election’s outcome is effectively zero, and voters know this. How one person votes almost never creates a financial obligation. The same, I submit, is true of answers to surveys. The pride may be real, but it is so cheaply acquired that it doesn’t seem significant enough to justify Williamson’s thesis.
Forgetting their pride? / In the first chapter, titled “Pride and Prejudice and Taxes,” we hear mostly from the people Williamson interviewed, along with some comments from the author.
The chapter begins with three questions from Williamson, each answered by a different interviewee. In response to “When I say the word ‘taxes’ … what do you think?” one respondent replied: “The cost of sort of running the country and maintaining a culture, infrastructure of our country. The cost of being an American.” In response to, if you were writing a book on your views of taxes, “what would be the most important chapter?” another respondent answered: “I would think social responsibility, things we all owe each other as members of a functioning society…. The fact that I really think more people should take more responsibility for making sure that we’re all okay as opposed to just ourselves.” In response to “How do you feel when you’re filling out your income taxes?” a third respondent said: “Like I am doing my part in supplying the needs and to help pay for the things in this country that are needed…. It’s my civic duty and that I am responsible for paying taxes.”
The chapter continues with Williamson informing us that “around four in five Americans see taxpaying as a moral responsibility” and that “over 90 percent of Americans agree” that “it is every American’s civic duty to pay their fair share of taxes.” Additional statements follow from interviewees on how they feel about taxpaying, such as “a responsibility to each other”; connects us to “basic considerations” for others such as “don’t steal” and “don’t kill your neighbors”; makes me think that “you can’t expect some guy like me, who’s an individual, to do everything on his own”; every individual is a “member of the group,” so taxpaying is “a responsibility to everyone else, and also to yourself”; “people in authority are in place because God put them there,” and so their laws should be followed; taxes pay for “the benefits of living in a society; and “it feels good to be able to contribute.”
Obviously, these comments are heavily influenced by a sense of identity with and connection to one’s community. But Williamson correctly points out that “one’s community extends only so far.” She continues that “many Americans draw a distinction between the people … to whom they feel a sense of shared obligation and those who fall outside their self-defined community,” with the most likely outsiders being immigrants, minorities, and those seen as not paying taxes. Many are not happy about paying taxes to be spent on certain groups. As one of Williamson’s interviewees delicately expressed it, “Our president [Barack Obama at the time] wants us to keep up the million (sic) of illegal aliens in our country or at least keep their kids here and feed them and keep them up with tax payers money that should be used to pay our country debts but is instead used to keep up Obama’s cousins.”
Williamson cannot be happy with many of these statements, and she creates credibility by including them. Yet she remains undeterred in believing that those who fulfill their obligation to pay taxes “take pride in their contribution to the public good.” She concludes the chapter by saying: “My interviewees describe the taxpaying obligation as … a belief in their fellowship with others in the community. To be a taxpayer is therefore a source of pride.”
Statements like these began to puzzle me once I realized that nowhere in this chapter did any of Williamson’s interviewees use the words “pride” or “proud.” The only mention of “pride” is in the chapter title and by Williamson in the above two quotations. Maybe later, I thought, the interviewed taxpayers will mention for themselves their pride in paying taxes. As Williamson states in her introduction, an advantage of interviews is that “they allow respondents to easily express the strength of their opinions.”
Ignorant on foreign aid? / In the second chapter, there is some mention of how taxpayers feel about themselves, but more about how they feel about people who are believed to not pay taxes. In the chapter’s opening quotation, when asked how he feels about being a taxpayer, a respondent states, “I like the fact that I am contributing in that way (to economic growth) because there are so many who aren’t.” “Anger at these supposed non-taxpayers is rampant,” Williamson writes, followed by more statements from her interviews similar to the ones in the first chapter. For example, a South Carolina independent’s first response about taxes was about “stupid people who don’t pay any.” Another interviewee says that “one must earn not only an income but an income of a certain level before one really qualifies as a taxpayer.”
These and other interviewee statements set the stage for Williamson to highlight a key theme in this chapter. She emphasizes accurately that almost all American adults pay taxes. Yet people typically think of only income taxes when taxes are mentioned, which (because of the high percentage of Americans who don’t pay income taxes) helps explain why the public (particularly Republicans, according to her data) overestimate the number of nontaxpayers. Even many of the relatively poor seem to think of themselves as taxpayers only reluctantly, despite being aware of their financial burden from sales taxes.
The third chapter examines how people want their tax dollars to be spent. There are no real surprises in this chapter, but there is an interesting insight indicating taxpayers are not as uninformed as commonly thought. People like spending on local projects that are visible (such as roads, schools, and public safety), with transfer programs receiving more mixed support—except for Social Security and health care—provided that the recipients “ ‘earned’ their benefits.” There are clear partisan differences between Democrats and Republicans on spending for such things as science, health care, and national defense. But the level of support from those in both parties is more favorable when tax money is going to “people with whom they feel a strong sense of shared interest” and “those who are chipping in for government’s costs.”
A common example of the rational ignorance of voters is that they greatly overestimate federal expenditures on foreign aid. Based on her interviews, however, Williamson argues such foreign aid estimates are not unreasonable because they are based on “the tendency of Americans to think of foreign aid in military terms,” a plausible tendency since “American military interventions are often described in terms that sound a lot like foreign aid.”
Williamson led astray? / In the fourth chapter, which considers attitudes about progressivity, Williamson has another opportunity to compliment her interviewees. She points out that most of them approve of the progressive tax code. However, she believes “the complexity of the tax code [has led] Americans (and some of those she interviewed) astray” by convincing them that a flat tax with few loopholes would increase the share of taxes paid by the rich. She clearly believes the rich are not paying enough taxes and that they would pay a smaller share under a flatter, simplified tax code.
Yet, both evidence and theory suggest that Williamson is the one being led astray on this, not her interviewees. The 1986 Reagan tax reforms lowered tax rates dramatically and eliminated a lot, though hardly all, tax loopholes. As a result, the wealthy began paying a larger percentage of federal income tax. The excess burdens of taxation and rent seeking (two concepts never mentioned) that would be reduced by reestablishing the Reagan reforms are currently creating economic distortions and waste that are harming the poor, the wealthy, and those in between.
Reestablishing the Reagan reforms would reduce the excess burdens of taxation and rent seeking that are now creating harmful economic distortions.
The last chapter of Williamson’s book that I consider in detail concerns wasteful government spending. She “asked only one question about waste, but interviewees [spontaneously] talked about this subject a great deal.” They blamed government waste on politicians’ perks, pork (special interests), inefficiency, and overpayments, with the most cited examples being money being spent on disliked programs. She once again believes her interviewees have been led astray on this topic, arguing that scholars “have expressed astonishment at Americans’ estimate[s] of government waste, … [which] often approach 50 percent [of the federal budget].” She adds that “a 2013 Congressional hearing put waste, fraud, and abuse at 7 percent of the federal budget.” Williamson continues to express skepticism of public opinion on government waste by informing us that “most people simply do not think of ‘government waste’ the way that experts do.” Yet the reader is never informed of what experts think about government waste. She never refers to any work by public choice economists, who would be more sympathetic to the interviewees’ view of the size of government waste.
There is another mention of “pride” in this chapter, again by Williamson. She states that “the interviewers’ sense of pride as taxpayers is often tainted by the thought that the money is wasted.” That’s not powerful support for her thesis about taxpayer pride.
Staying out of jail / Williamson’s concluding chapter solidified my initial suspicion that her research really doesn’t make the case that Americans are proud to pay taxes. No doubt many will say they are when asked by earnest pollsters, and some of them probably do feel that way. But I doubt that such pride is intense enough for many to move it very far from the bottom of the list of things they are proud of. If pride was mentioned explicitly by any of the 49 Americans who Williamson interviewed, she failed to include it in her book.
She seems remarkably immune to the thought that people pay their taxes because governments are fully prepared to make their lives miserable if they don’t. This is reflected in her closing statement that
taxpaying allows us to demonstrate our commitment to the community and to the country. It is the investment of a people in the shared task of self-governance. By these lights, it is no wonder that so many Americans see it as a badge of pride.
Given the penalties that befall nonfilers, it seems odd to describe taxpayers as being “allowed” to pay their taxes.
Let me admit that any pride I feel about paying taxes is overwhelmed by my pride in staying out of jail. I cannot speak for others, but as for me, if the government allowed me to reduce my taxes as much as my taxpaying pride permitted, my first question would be, Are negative taxes allowed, or do I have to accept the corner solution?
