Read My Lips: Why Americans Are Proud to Pay Taxes

Read My Lips: Why Americans Are Proud to Pay Taxes The social welfare system in the United States cannot be fully understood without also considering the tax system. Tax revenues fund redistributive programs and publicly supported social services. Who gets taxed, for what reasons, and at what rates shapes the distribution of economic resources. The tax system incorporates important cash transfer programs. With respect to those with low incomes, for example, the Earned Income Tax Credit (EITC) is now a far larger program, both by participation rates and federal expenditures, than Temporary Assistance for Needy Families (“welfare”). The tax system, then, deserves careful attention from social workers. Political scientist Vanessa Williamson’s Read My Lips: Why Americans Are Proud to Pay Taxes is an important addition to the literature on the politics of tax policy in the United States. It offers insights that social welfare professionals and researchers will find both pleasantly surprising and deeply troubling. Williamson’s central purpose is to understand Americans’ attitudes toward tax policy. The dominant narrative around taxation in the United States is one of hostility. It is widely assumed—and reinforced through media framing and political campaign rhetoric—that the typical person in the United States abhors taxes in all forms. These impressions are largely superficial, however, and Williamson uses qualitative data from in-depth interviews and open-ended survey questions, supplemented with quantitative opinion survey analysis, to better understand tax attitudes. Her central finding is that Americans, even those who lean to the political right, actually feel positively about paying taxes. They consider it a civic obligation, and contributing to the greater good is a source of pride. Further investigation, however, reveals severe limits to this sense of collective responsibility. Williamson uncovers a dramatic misperception in who pays taxes that stigmatizes the socially and economically marginalized. Almost all adults pay taxes of some form. Even those who don’t pay federal income tax, for example, might pay payroll taxes or state sales taxes. However, many Americans do not consider those with low incomes to be taxpayers, and Williamson finds that stereotypes about the undeserving poor emerge when discussing taxes. Williamson’s respondents take “taxpayer” to mean income tax payer and give centrality to the income tax as a conveyer of economic citizenship despite the burden of other taxes falling disproportionately on those with low or moderate incomes. Immigrants are also a target of ire, being perceived purely as beneficiaries of others’ tax contributions by some respondents. Williamson attributes the importance her respondents give to the income tax to the structure of the U.S. tax system. The income tax is highly visible and requires an investment of effort on the part of the individual taxpayer not found with other taxes. The payroll tax, for example, is seamlessly deducted from an employee’s paycheck; its value as given by the pay stub is also lower than the actual tax burden, as only the employee’s contribution is listed. State sales tax is simply tacked onto purchases, and, as Williamson’s own respondents note, its costs are often perceived only on very large purchases. In sharp contrast, properly filing the income tax requires action on the payer’s part that makes visible its actual costs. The centrality of the income tax has some surprising side effects. Respondents are often quite familiar with social welfare policies implemented through the income tax system, such as the EITC and the Child Tax Credit, and approve of these programs. Unsettlingly for those who assume policies such as the EITC sidestep traditional welfare politics, for some right-leaning respondents the rhetoric of deservingness often directed toward cash assistance recipients also applies to EITC beneficiaries. These few believe the EITC is excess reward for inadequate work, especially for those who receive a refund. Respondents generally favor a progressive tax code in which those who are wealthier pay a larger share in taxes, though with some caveats. Williamson finds, for instance, that her respondents are hesitant to punish hard work. Marginal tax rates, central to the United States’ progressive income tax system, are also misunderstood. Interviewees often mistake marginal rates for effective tax rates, with the assumption that an individual’s top rate applies to all income. The income tax filing process, which involves the taxpayer identifying the credits and other offsets for which he or she is eligible, also encourages individuals to think of taxes in terms of loopholes and tax breaks rather than in terms of tax rates. The focus on loopholes leads to a perception that the very wealthy are not contributing their fair share, but without reference to the sizable declines in marginal rates for very high earners in recent decades. Williamson uncovers two other important misperceptions with respect to progressivity. First, some individuals mistakenly view sales taxes as progressive, as someone who spends more also pays more tax. In reality, sales tax is quite regressive, disproportionately affecting low-income taxpayers. Second, because of the focus on tax breaks instead of tax rates, some respondents believe a flat income tax system would raise taxes on high earners when, again, it would negatively affect those with low incomes and likely reduce taxes for the very well off. Williamson’s work also reveals that, with respect to fiscal policy, the language used by policy researchers and other experts does not correspond to the way members of the general public use identical terms. “Government waste,” for example, may mean inefficiency to analysts of public policy, but to taxpayers waste is often merely a catchall term for disfavored programs and spending priorities. Similarly, respondents conflate foreign aid, a very small portion of the federal budget, with military support of foreign nations (military spending is otherwise quite positively perceived). It is therefore unsurprising that members of the general public give much larger estimates of the amount of waste in government spending and the proportion of the federal budget devoted to foreign aid than policy experts provide. Overall, Williamson concludes that the common belief about American tax attitudes—that the typical person is opposed to, or even angry about, taxation in any form—is incorrect. Members of the public feel positively about contributing to the common good, taking it as a marker of full participation in society. These feelings are warped, however, by misperceptions, misunderstandings, and biases against groups not perceived as adequate contributors. On the one hand, Williamson’s findings place members of the general public in a more positive light than other social science research on tax politics. Some previous studies of attitudes regarding taxation portray the typical American as woefully uninformed (Bartels, 2005). Williamson suggests that Americans are quite familiar with those taxes directly relevant to themselves and with some aspects of the tax system other researchers have assumed were outside the view of the general public. On the other hand, Williamson frequently encounters misinformation consistent with the more negative views expressed by other authors, but places the blame on the institutional structure of taxation rather than faulting individual taxpayers. She proposes that many of these problematic beliefs could be resolved through clear distribution of information, referencing experiments with social security statements that improved perceptions of the program. Although better information may address some problems, deeper societal change may be required to attenuate the biases expressed by some of Williamson’s respondents against those with low incomes, racial and ethnic minorities, and immigrants. I have two concerns with Williamson’s analysis. First, her entire claim that Americans are proud to pay taxes rests on the veracity of respondents’ self-reported attitudes. If the positive responses are merely an attempt by study participants to please the researcher, it undercuts the entire argument. Second, Williamson treats the information environment that produces many of the misunderstandings as value-neutral, treading lightly around the incentives of political and economic elites to sustain rather than correct misperceptions about tax policy. This approach is understandable; her purpose is to analyze Americans’ attitudes toward taxation, not to scrutinize American political economy writ large. The fiscal policy preferences of the very wealthy do not necessarily align with those of middle- and low-income Americans, however, and political scientists Jacob Hacker and Paul Pierson (2005) have argued that fiscal policy can be deliberately crafted to mislead the general public about the effects of tax changes. Williamson has identified blind spots in public knowledge and opinion that could be exploited for such purposes, and a greater discussion of whether and how such manipulation is happening would have been useful. Despite these limitations, the book makes substantial contributions to understanding taxation and tax politics in the United States. Its findings have a very clear relationship to the politics of the welfare state, especially with respect to economically and socially disadvantaged populations. These insights also inform contemporary debates over policy responses to extreme economic inequality, one of the central problems of the current era. Finally, Williamson’s analysis draws attention to the connection between economic stratification and perceptions about who is considered a full participant in society. The book is therefore a worthwhile read for social workers and others interested in U.S. social and economic policy specifically and the health of American democracy more broadly. References Bartels, L. M. ( 2005). Homer gets a tax cut: Inequality and public policy in the American mind. Perspectives on Politics,  3( 1), 15– 31. doi:10.1017/S1537592705050036 Google Scholar CrossRef Search ADS   Hacker, J. S., & Pierson, P. ( 2005). Abandoning the middle: The Bush tax cuts and the limits of democratic control. Perspectives on Politics,  3( 1), 33– 53. Google Scholar CrossRef Search ADS   © 2018 National Association of Social Workers This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Social Work Oxford University Press

Read My Lips: Why Americans Are Proud to Pay Taxes

Social Work , Volume Advance Article – Apr 26, 2018

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Oxford University Press
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© 2018 National Association of Social Workers
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0037-8046
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1545-6846
D.O.I.
10.1093/sw/swy027
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Abstract

The social welfare system in the United States cannot be fully understood without also considering the tax system. Tax revenues fund redistributive programs and publicly supported social services. Who gets taxed, for what reasons, and at what rates shapes the distribution of economic resources. The tax system incorporates important cash transfer programs. With respect to those with low incomes, for example, the Earned Income Tax Credit (EITC) is now a far larger program, both by participation rates and federal expenditures, than Temporary Assistance for Needy Families (“welfare”). The tax system, then, deserves careful attention from social workers. Political scientist Vanessa Williamson’s Read My Lips: Why Americans Are Proud to Pay Taxes is an important addition to the literature on the politics of tax policy in the United States. It offers insights that social welfare professionals and researchers will find both pleasantly surprising and deeply troubling. Williamson’s central purpose is to understand Americans’ attitudes toward tax policy. The dominant narrative around taxation in the United States is one of hostility. It is widely assumed—and reinforced through media framing and political campaign rhetoric—that the typical person in the United States abhors taxes in all forms. These impressions are largely superficial, however, and Williamson uses qualitative data from in-depth interviews and open-ended survey questions, supplemented with quantitative opinion survey analysis, to better understand tax attitudes. Her central finding is that Americans, even those who lean to the political right, actually feel positively about paying taxes. They consider it a civic obligation, and contributing to the greater good is a source of pride. Further investigation, however, reveals severe limits to this sense of collective responsibility. Williamson uncovers a dramatic misperception in who pays taxes that stigmatizes the socially and economically marginalized. Almost all adults pay taxes of some form. Even those who don’t pay federal income tax, for example, might pay payroll taxes or state sales taxes. However, many Americans do not consider those with low incomes to be taxpayers, and Williamson finds that stereotypes about the undeserving poor emerge when discussing taxes. Williamson’s respondents take “taxpayer” to mean income tax payer and give centrality to the income tax as a conveyer of economic citizenship despite the burden of other taxes falling disproportionately on those with low or moderate incomes. Immigrants are also a target of ire, being perceived purely as beneficiaries of others’ tax contributions by some respondents. Williamson attributes the importance her respondents give to the income tax to the structure of the U.S. tax system. The income tax is highly visible and requires an investment of effort on the part of the individual taxpayer not found with other taxes. The payroll tax, for example, is seamlessly deducted from an employee’s paycheck; its value as given by the pay stub is also lower than the actual tax burden, as only the employee’s contribution is listed. State sales tax is simply tacked onto purchases, and, as Williamson’s own respondents note, its costs are often perceived only on very large purchases. In sharp contrast, properly filing the income tax requires action on the payer’s part that makes visible its actual costs. The centrality of the income tax has some surprising side effects. Respondents are often quite familiar with social welfare policies implemented through the income tax system, such as the EITC and the Child Tax Credit, and approve of these programs. Unsettlingly for those who assume policies such as the EITC sidestep traditional welfare politics, for some right-leaning respondents the rhetoric of deservingness often directed toward cash assistance recipients also applies to EITC beneficiaries. These few believe the EITC is excess reward for inadequate work, especially for those who receive a refund. Respondents generally favor a progressive tax code in which those who are wealthier pay a larger share in taxes, though with some caveats. Williamson finds, for instance, that her respondents are hesitant to punish hard work. Marginal tax rates, central to the United States’ progressive income tax system, are also misunderstood. Interviewees often mistake marginal rates for effective tax rates, with the assumption that an individual’s top rate applies to all income. The income tax filing process, which involves the taxpayer identifying the credits and other offsets for which he or she is eligible, also encourages individuals to think of taxes in terms of loopholes and tax breaks rather than in terms of tax rates. The focus on loopholes leads to a perception that the very wealthy are not contributing their fair share, but without reference to the sizable declines in marginal rates for very high earners in recent decades. Williamson uncovers two other important misperceptions with respect to progressivity. First, some individuals mistakenly view sales taxes as progressive, as someone who spends more also pays more tax. In reality, sales tax is quite regressive, disproportionately affecting low-income taxpayers. Second, because of the focus on tax breaks instead of tax rates, some respondents believe a flat income tax system would raise taxes on high earners when, again, it would negatively affect those with low incomes and likely reduce taxes for the very well off. Williamson’s work also reveals that, with respect to fiscal policy, the language used by policy researchers and other experts does not correspond to the way members of the general public use identical terms. “Government waste,” for example, may mean inefficiency to analysts of public policy, but to taxpayers waste is often merely a catchall term for disfavored programs and spending priorities. Similarly, respondents conflate foreign aid, a very small portion of the federal budget, with military support of foreign nations (military spending is otherwise quite positively perceived). It is therefore unsurprising that members of the general public give much larger estimates of the amount of waste in government spending and the proportion of the federal budget devoted to foreign aid than policy experts provide. Overall, Williamson concludes that the common belief about American tax attitudes—that the typical person is opposed to, or even angry about, taxation in any form—is incorrect. Members of the public feel positively about contributing to the common good, taking it as a marker of full participation in society. These feelings are warped, however, by misperceptions, misunderstandings, and biases against groups not perceived as adequate contributors. On the one hand, Williamson’s findings place members of the general public in a more positive light than other social science research on tax politics. Some previous studies of attitudes regarding taxation portray the typical American as woefully uninformed (Bartels, 2005). Williamson suggests that Americans are quite familiar with those taxes directly relevant to themselves and with some aspects of the tax system other researchers have assumed were outside the view of the general public. On the other hand, Williamson frequently encounters misinformation consistent with the more negative views expressed by other authors, but places the blame on the institutional structure of taxation rather than faulting individual taxpayers. She proposes that many of these problematic beliefs could be resolved through clear distribution of information, referencing experiments with social security statements that improved perceptions of the program. Although better information may address some problems, deeper societal change may be required to attenuate the biases expressed by some of Williamson’s respondents against those with low incomes, racial and ethnic minorities, and immigrants. I have two concerns with Williamson’s analysis. First, her entire claim that Americans are proud to pay taxes rests on the veracity of respondents’ self-reported attitudes. If the positive responses are merely an attempt by study participants to please the researcher, it undercuts the entire argument. Second, Williamson treats the information environment that produces many of the misunderstandings as value-neutral, treading lightly around the incentives of political and economic elites to sustain rather than correct misperceptions about tax policy. This approach is understandable; her purpose is to analyze Americans’ attitudes toward taxation, not to scrutinize American political economy writ large. The fiscal policy preferences of the very wealthy do not necessarily align with those of middle- and low-income Americans, however, and political scientists Jacob Hacker and Paul Pierson (2005) have argued that fiscal policy can be deliberately crafted to mislead the general public about the effects of tax changes. Williamson has identified blind spots in public knowledge and opinion that could be exploited for such purposes, and a greater discussion of whether and how such manipulation is happening would have been useful. Despite these limitations, the book makes substantial contributions to understanding taxation and tax politics in the United States. Its findings have a very clear relationship to the politics of the welfare state, especially with respect to economically and socially disadvantaged populations. These insights also inform contemporary debates over policy responses to extreme economic inequality, one of the central problems of the current era. Finally, Williamson’s analysis draws attention to the connection between economic stratification and perceptions about who is considered a full participant in society. The book is therefore a worthwhile read for social workers and others interested in U.S. social and economic policy specifically and the health of American democracy more broadly. References Bartels, L. M. ( 2005). Homer gets a tax cut: Inequality and public policy in the American mind. Perspectives on Politics,  3( 1), 15– 31. doi:10.1017/S1537592705050036 Google Scholar CrossRef Search ADS   Hacker, J. S., & Pierson, P. ( 2005). Abandoning the middle: The Bush tax cuts and the limits of democratic control. Perspectives on Politics,  3( 1), 33– 53. Google Scholar CrossRef Search ADS   © 2018 National Association of Social Workers This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

Journal

Social WorkOxford University Press

Published: Apr 26, 2018

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