Pride and Prejudice and Taxes
When I say the word "taxes" to you ... what do you think of when I say that? Daniel, 35, independent from California: I think of taxes as the cost of sort of running the country and maintaining a culture, infrastructure of our society. The cost of being an American.
* * *
As you know, I'm studying Americans' views of taxation and my plan is to eventually write a book about it. But if it were your book on your views, what would be the most important chapter?
Alicia, 30, Democrat from Florida: I would think social responsibility, things we all owe each other as members of a functioning society. We're not —, you know, no man is an island. We are all in this together. And, I think that more people —, I would just really want to drive home the fact that I really think more people should take more responsibility for making sure that we're all okay as opposed to just themselves.
* * *
So, I want to talk to you a little bit about the income taxpaying process. How do you feel when you're filling out your income taxes?
Roy, 61, Republican from Ohio: Oh, I feel like I am doing my part in supplying the needs and to help pay for things in this country that are needed. So, in a small way, I do feel like it's my civic duty and that I'm responsible for paying taxes.
The subject of taxation is fraught with moral import. Even relatively anodyne questions about taxes provoked my interviewees to make bold statements about responsibility, patriotism, and the duties of a citizen. Daniel is a former Marine. He talks about the "cost of being American." Alicia works for a national department store chain. She says "social responsibility" would be the most important chapter in her book on taxes. Roy is a retired letter carrier. He talks about taxation as a "civic duty." Rather than merely being a payment in exchange for services, or a requirement of the law, taxpaying is widely understood as an ethical act.
This chapter investigates how Americans think about the responsibility of taxpaying, and why they think taxpaying is a responsibility at all. In surveys Americans share a near-consensus view of taxpaying as a civic obligation. In interviews Americans have a lot to say on the subject of their fiscal citizenship, and they describe their responsibility in terms of their sense of shared interest, of fellowship with other Americans. Almost all of my interviewees justify taxpaying by noting that their lives are tied to the broader society, and therefore they must contribute their tax dollars to the wider social good.
But this social commitment is limited. When my respondents do not feel close bonds with other members of the community — as is often the case when it comes to recent immigrants — they see taxpaying as an unfair burden. Predictably, these comments carry strong racial undertones, and sometimes are accompanied by explicitly racist remarks. Thus support for taxpaying extends only to the borders of one's own sense of community. When taxpayers believe the political community is too inclusive, their attitudes about taxes tend to become more negative.
Taxpaying Is a Civic and Moral Responsibility, Americans Agree
While tax policy has become a highly controversial issue in recent decades, the idea that one has an obligation to pay one's taxes remains Americans' consensus view. Figure 1.1 presents some of the more commonly asked survey questions about the responsibility of taxpaying, across multiple wordings of a question, survey firms, and decades. All of these questions produce quite similar results; around four in five Americans, give or take a few percentage points, see taxpaying as a moral responsibility and tax evasion as morally wrong. This is a belief that is particularly strong in the United States; compared to residents of fourteen European countries, Americans are the most likely to say that cheating on your taxes is "never justified." And the level of agreement becomes even stronger when the question is framed in civic terms. Over 90 percent of Americans agree with the statement, "It is every American's civic duty to pay their fair share of taxes."
It is important to recognize exactly how unusual it is to get this level of accord on a survey question. By way of comparison, the percentage of people who say it is wrong to cheat on your income taxes is higher than the percentage of Americans who report liking Elvis Presley (79 percent), or who describe astronaut Neil Armstrong as a hero (75 percent). The percentage of Americans who deny that taxpaying is a civic duty is approximately equivalent to the percentage of Americans who report believing that there is a chance that Elvis Presley is still alive (7 percent) or that the moon landing was faked (6 percent). When asked about the duty of taxpaying, Americans are about as close to consensus as they ever get.
Moreover, Americans' "tax morale" (as scholars call this strong social norm of tax compliance) is more or less impervious to the question of government waste. When Americans are encouraged to think about wasteful government spending as an excuse for tax avoidance, they reject this argument. This was true even in the early eighties, when public estimates of government waste were at their peak and many states were rushing to pass new tax caps. In 1983, Time magazine asked respondents if they agreed with the statement, "Government spending is out of control, so there's nothing wrong with holding back a little bit on taxes." The question implies that Americans are buying a product that is not worth the price — surely that should reduce Americans' willingness to foot the bill. And yet, 80 percent of respondents disagreed, approximately the same percentage that typically describes tax avoidance as wrong.
The public commitment to taxpaying also transcends political partisanship. Though contemporary Republican elites are unified behind an anti-tax platform, Republican voters are more likely than Democrats to see taxpaying as a moral obligation. In 2013 the Pew Research Center asked, "Do you personally believe that not reporting all income on your taxes is morally acceptable, morally wrong, or is it not a moral issue?" A large majority, 73 percent of Americans, described tax evasion as morally wrong. Looking at this poll more closely, one finds that Republicans were more likely to oppose tax evasion on moral grounds. Seventy-eight percent of Republicans saw avoiding one's taxes as morally wrong, compared to only 71 percent of Democrats.
Of course, Democrats and Republicans are different in a number of ways, and one might think that these other characteristics are skewing this result. For instance, one might think that Republicans are more likely to describe tax evasion in moral terms because of the preponderance of evangelical Christians among the Republican base. But even taking account of the respondents' religiosity, we find that Republicans are still more likely than Democrats to oppose underreporting one's taxable income. Republicans believe strongly in paying taxes.
What should we take from this widely held commitment to taxpaying? It is possible, of course, that survey takers are simply responding to an attractive-sounding platitude. It might be socially desirable to agree with statements that make moral claims rather than risk being seen as immoral or unpatriotic. Perhaps these surveys are just cheap talk.
But when it comes to taxpaying, Americans put their money where their mouths are. The United States has one of the highest rates of tax compliance in the world. One might think to credit the IRS with making unhappy tax-payers foot their bills, and certainly our system of tax withholding and reporting is crucial to ensuring that tax money is collected. But studies have shown that the levels of tax compliance in the United States cannot be explained exclusively by enforcement. (In fact, some economists assessing the actual risks of being audited and fined have concluded that a rational person would evade their taxes entirely!) Instead, more than 140 million households file their taxes every year, and about 83 percent of the total tax liability is paid to the IRS on time. Social scientists studying tax compliance explain the paradox by saying that Americans have a culture of high "tax morale."
For my interviewees, moreover, seeing taxpaying as a civic duty or moral responsibility — what some scholars call "fiscal citizenship" — is not just a pretty phrase. Instead, it is an interpretation of the world that many defend strongly.
Looking Deeper: Taxpaying and the Meaning of Responsibility
Interviews offer a venue to explore what Americans mean by saying that taxpaying is a civic duty or that tax evasion is morally unacceptable. All but four interviewees agreed that taxpaying is a responsibility, a result in keeping with the national survey data presented earlier in the chapter. When I asked the interviewees to explain what this responsibility entailed, the strength and consistency of their views was remarkable. Interviewees sometimes adopted patriotic language, talking about taxes as a way of supporting the country, and at other times used a more communitarian terminology — talking about "us," "the people" or "the community." Many used the metaphor of "the good neighbor" to illustrate the responsibilities of the taxpayer. All of these analogies share a common core of fellowship: a sense of connection to a broader group upon which each individual depends.
Interviewees commonly adopt patriotic language to describe the responsibility of taxpaying. At the beginning of this chapter, I quoted Daniel, a former Marine; his comment that taxpaying is "the cost of being an American" came in response to my very first question. Roy, the retired letter carrier for the U.S. Post Office, says that taxpaying is a responsibility to "ourselves, really, and to the United States." Aaron is a 33-year-old Democrat working in retail in northern Alabama. He sees taxpaying as "doing your part as a citizen." Jason is a high school teacher, a 26-year-old Republican from Ohio. He sees taxpaying as a responsibility to "the founding fathers" and to "your country." In total, twenty-seven interviewees talked about the responsibility of taxpaying as a bond with the nation as a whole.
Other interviewees saw taxation in a communitarian light: as a responsibility one has to other people. Jessica, a mental health therapist living outside Atlanta, Georgia, sees taxpaying as a responsibility "to the group as a member of the group." Alicia is a 30-year-old woman from Tampa, Florida, working in regional sales for a national department store chain. She says taxpaying is a responsibility to "society as a whole, to our community." Craig is originally from Syracuse, New York, and works in software in Tallahassee, Florida. He says taxes are "a responsibility to each other, that's the original reason why taxes were created." Rhonda, a Republican pharmacy technician, believes taxpaying is a responsibility "to all of us and everyone." Thirteen interviewees used only communitarian language to describe the responsibility of taxpaying, while twelve described taxpaying as a responsibility both to other people and to the country.
In talking about the responsibility of taxpaying, some interviewees drew, consciously or unconsciously, from the Ten Commandments. Alicia from Florida connects taxpaying to "basic considerations" for other people. "Don't steal," she says. "Don't kill your neighbor." Others use more legalistic language. Matthew, an army helicopter pilot stationed in Washington state, equates tax evasion with "sticking up a bank" or "petty theft." Taxpaying falls into a category of very basic responsibilities to avoid hurting others.
Whether respondents adopted a civic rhetoric or spoke in more communitarian terms, the interviewees imagined themselves as members of a larger entity without which they could not succeed or even survive, and so to whom they were indebted. The interviewees themselves used a variety of different rhetorical frames to express this sentiment. Some imagined a world without public goods, and noted that an individual could not flourish in such an environment. Some described their own personal success and happiness as a result of their status as Americans. Others explicitly claimed to benefit from goods that accrued to other people. Finally, a few interviewees responded in more abstract terms, expressly stating that helping the country is a way of helping oneself. In each case, however, the rationale is the same: one pays taxes because one's fate is bound with that of the larger community.
Among my interviewees, a common way of thinking about taxes was to imagine what life would be like without a functioning government. "If I want to go live in my shack in the mountains, I shouldn't have to pay anything. Nobody's helping me," says Joe, a retiree in California. But in modern, complex society, Joe believes, "you can't expect some guy like me, who's an individual, to do everything on his own." Members of modern society owe something to one another, and so must pay taxes. Lawrence and Eileen make the same point, with reference to contemporary regions without a functioning state and civil society. Lawrence, a hair stylist from Michigan, says taxes prevent someone from "throwing me out of my house in the middle of the night and setting up a base camp of Al-Qaeda or whatever." Eileen, a 59-year-old former mill worker, says that responsibilities like taxpaying are what keep the United States from being a "Somalia type of place." Without the larger community, there is only chaos and insecurity for the individual.
Several interviewees explicitly make the point that caring for the community is in one's self-interest. "To take care of your country is taking care of yourself," says 67-year-old Donna, from the Gulf Coast of Texas. "Taking care of your city, your neighborhood, your house is taking care of yourself." Jessica, a therapist in Georgia, makes a similar point; because an individual is a "member of the group," taxpaying is "a responsibility to everyone else and also to yourself." Tracy, who works at the University of Alabama, uses a more concrete example. "If you don't pay for people to be decently educated then they're going to be drug addicts or they're going to come and break into your home," she says. While Tracy's explanation is somewhat bleaker, she, Donna, and Jessica agree that even entirely self-interested persons have the incentive to care for those around them. Or, as Alicia puts it, "You know, no man is an island. We are all in this together."
By contrast, only one interviewee explained the taxpaying obligation as a kind of obedience. Bonnie, an antique store owner from Dallas, Texas, quotes the biblical parable in which Jesus tells his followers to give "unto Caesar the things which are Caesar's." What Bonnie takes from this story is a conviction that "people in authority are in place because God put them there," and so their laws should be followed. Bonnie seems to see taxpaying not so much as a civic or patriotic duty, but rather a simple compliance with the law. No other interviewee justified taxpaying in this way.
In fact, respondents tended to respond harshly to both legal tax avoidance and illegal tax evasion. Bridget is a private investigator living in rural Pennsylvania. She says, "I don't think people should be exempt" from paying their fair share of taxes just because "they can find a loophole around it." It is not merely the law that creates the obligation of taxpaying — which makes sense, given (as I noted earlier in the chapter) that tax compliance is higher than makes sense if it were merely a response to enforcement.
That my interviewees were so focused on the community, rather than their individual benefits, was especially surprising because our discussion of responsibility usually followed my question about whether an interviewee felt he or she had personally benefited from tax dollars. This line of questioning could have put individualized rewards (or the lack thereof) at the forefront of the interviewees' minds. But only a handful of interviewees explain the responsibility of taxpaying in terms of the benefits received. Ralph, a drug addiction counselor from central New York state, is one of these exceptions. Using the metaphor of paying for a hospital stay, he concludes, "You get the service, you pay for it." Denise is a 30-year-old woman from Connecticut. At one point she talks about taxation as a kind of insurance plan. "You never know when ... you might need assistance," she says. But mostly, Denise talks about obligations we have as a community. Taxes pay for "the benefits of living in society," she says. "It's just a common goal." Again, her logic is one of shared interest. The interviewees usually think about taxation not as an individual cost calculation, but as a shared cost of the commons.