1 00:00:11,080 --> 00:00:14,720 Speaker 1: Hello, and welcome to another episode of the All Thoughts Podcast. 2 00:00:14,800 --> 00:00:19,280 Speaker 1: I'm Tracy Hallaway and I'm Joe. Wasn't thal Joe? Uh? 3 00:00:19,640 --> 00:00:22,400 Speaker 1: Let's see. I know we keep putting caveats on all 4 00:00:22,400 --> 00:00:26,120 Speaker 1: our episodes recently, but we are recording this with less 5 00:00:26,120 --> 00:00:29,520 Speaker 1: than a week to go before the presidential election in 6 00:00:29,560 --> 00:00:33,240 Speaker 1: the US. Yeah, just just five days to go. Yeah, 7 00:00:33,440 --> 00:00:35,320 Speaker 1: so the whole world could be different by the time 8 00:00:35,360 --> 00:00:38,760 Speaker 1: people are listening to this. This whole episode could just 9 00:00:38,800 --> 00:00:41,600 Speaker 1: be like this weird time capsule from some normal time 10 00:00:41,840 --> 00:00:44,120 Speaker 1: or I guess not really normal these days, but from 11 00:00:44,159 --> 00:00:48,599 Speaker 1: some totally different time. So hello from the past. So 12 00:00:48,720 --> 00:00:51,520 Speaker 1: on that note, you know, everyone in DC is getting 13 00:00:51,560 --> 00:00:55,160 Speaker 1: ready for the election, and at the same time, you 14 00:00:55,200 --> 00:00:58,760 Speaker 1: can just imagine there are rooms filled with people, um, 15 00:00:58,800 --> 00:01:01,640 Speaker 1: you know, with policy waks who are trying to figure 16 00:01:01,680 --> 00:01:05,560 Speaker 1: out what policy might look like under both you know, 17 00:01:05,600 --> 00:01:09,400 Speaker 1: another four years of Trump and also potentially four years 18 00:01:09,440 --> 00:01:12,360 Speaker 1: of Biden. Yeah. So I think, like, you know, the 19 00:01:12,440 --> 00:01:15,240 Speaker 1: first order of business most people assume, if there's say 20 00:01:15,280 --> 00:01:19,800 Speaker 1: a Biden administration, would be some sort of major spending stimulus, 21 00:01:19,800 --> 00:01:22,479 Speaker 1: sort of heavy running up the deficit in order to 22 00:01:22,520 --> 00:01:26,960 Speaker 1: get the economy back to trend or accelerate the return 23 00:01:27,040 --> 00:01:30,600 Speaker 1: to full employment. Then you know, that's the kind of 24 00:01:30,680 --> 00:01:33,920 Speaker 1: thing that people imagine could get past in February. But 25 00:01:34,120 --> 00:01:36,920 Speaker 1: if you know, we're talking about a Biden administration or 26 00:01:36,920 --> 00:01:39,720 Speaker 1: any Democratic administration in the future, then there would also 27 00:01:39,760 --> 00:01:42,960 Speaker 1: be further policy questions beyond that, and one of those, 28 00:01:43,000 --> 00:01:45,759 Speaker 1: of course would be, uh, the future of the tax system, 29 00:01:45,760 --> 00:01:49,720 Speaker 1: which was reformed in the first Trump administration. Yeah, I mean, 30 00:01:49,960 --> 00:01:53,080 Speaker 1: taxes have been a big talking point, you know, ever 31 00:01:53,120 --> 00:01:56,480 Speaker 1: since Trump came in in six and did a lot 32 00:01:56,520 --> 00:01:59,720 Speaker 1: of stuff, including reducing the corporate tax rate. But the 33 00:02:00,040 --> 00:02:03,240 Speaker 1: Biden tax program is also getting a lot of attention 34 00:02:03,280 --> 00:02:06,000 Speaker 1: at the moment because he's talking about doing a tax 35 00:02:06,440 --> 00:02:11,200 Speaker 1: hike for very wealthy individuals and also I think talking 36 00:02:11,240 --> 00:02:15,079 Speaker 1: a little bit about maybe um upping or imposing tax 37 00:02:15,200 --> 00:02:19,480 Speaker 1: on capital gains. So clearly this is all in focus. Uh, 38 00:02:19,760 --> 00:02:23,000 Speaker 1: death and taxes are inevitable. Um the fact that all 39 00:02:23,040 --> 00:02:26,000 Speaker 1: lots would do an episode on taxes, I suppose, is 40 00:02:26,040 --> 00:02:30,160 Speaker 1: also inevitable. But I think one really interesting thing when 41 00:02:30,160 --> 00:02:33,080 Speaker 1: it comes to tax policy is, you know, there is 42 00:02:33,120 --> 00:02:37,960 Speaker 1: this idea among economists and among policy makers that they're 43 00:02:38,080 --> 00:02:41,280 Speaker 1: trying to balance a number of things here, you know, 44 00:02:41,480 --> 00:02:45,600 Speaker 1: they're trying to balance I guess you would say the 45 00:02:45,680 --> 00:02:51,160 Speaker 1: efficiency cost of taxes um with their benefits, so, you know, 46 00:02:51,280 --> 00:02:56,800 Speaker 1: making society more equal, bringing revenue for the government obviously, 47 00:02:57,480 --> 00:02:59,200 Speaker 1: and there's a tendency to look at that in a 48 00:02:59,240 --> 00:03:03,080 Speaker 1: really rational way. But as hopefully a lot of people 49 00:03:03,240 --> 00:03:06,919 Speaker 1: know already, the average person on the street might have 50 00:03:06,960 --> 00:03:11,400 Speaker 1: different ideas about the drawbacks or the benefits of taxes 51 00:03:11,639 --> 00:03:15,320 Speaker 1: um depending on their personal position. Right, They're not necessarily 52 00:03:15,320 --> 00:03:19,200 Speaker 1: thinking about it rationally. No, people don't necessarily think about 53 00:03:19,240 --> 00:03:22,880 Speaker 1: taxes rationally other than most people don't like paying them, 54 00:03:23,080 --> 00:03:27,280 Speaker 1: and most people, all else equal, would like to pay less. 55 00:03:27,919 --> 00:03:29,680 Speaker 1: But I do think, you know, it's interesting, and we'll 56 00:03:29,720 --> 00:03:33,839 Speaker 1: get into this in the conversation. I have a I 57 00:03:33,880 --> 00:03:36,960 Speaker 1: feel like the salience of taxes as a political issue 58 00:03:37,000 --> 00:03:38,640 Speaker 1: has gone down, that there are a lot of people 59 00:03:38,800 --> 00:03:42,040 Speaker 1: for whom cutting taxes. You know, it's this huge mantra 60 00:03:42,120 --> 00:03:44,760 Speaker 1: for years. Is probably one of the defining elements of 61 00:03:45,040 --> 00:03:47,720 Speaker 1: the GOP in the US is that they're the party 62 00:03:47,720 --> 00:03:50,200 Speaker 1: of tax cuts. And of course Trump did cut taxes, 63 00:03:50,600 --> 00:03:52,800 Speaker 1: but it feels like, you know, everything else going on 64 00:03:52,960 --> 00:03:55,760 Speaker 1: these days we have so many cultural fights and COVID 65 00:03:55,880 --> 00:03:59,280 Speaker 1: and other question the salience of the tax number, which 66 00:03:59,280 --> 00:04:01,560 Speaker 1: has already been a lot, feels like it has a 67 00:04:01,640 --> 00:04:04,480 Speaker 1: less political residence. But we'll discuss that with our guests. 68 00:04:04,520 --> 00:04:07,040 Speaker 1: Maybe that's just my bias. I don't know, who knows 69 00:04:07,040 --> 00:04:10,800 Speaker 1: if that's actually true. No, I think you're right. It 70 00:04:10,880 --> 00:04:13,080 Speaker 1: just feels like there are like, you know, like tax 71 00:04:13,160 --> 00:04:15,480 Speaker 1: cut Republicans. It used to just be such a thing, 72 00:04:15,480 --> 00:04:18,680 Speaker 1: and it feels like that people have sort of moved on. 73 00:04:18,720 --> 00:04:23,280 Speaker 1: But who knows the good old days when the only 74 00:04:23,320 --> 00:04:27,000 Speaker 1: thing people were really getting worried about was higher taxes. Yeah, 75 00:04:27,040 --> 00:04:31,720 Speaker 1: easier times, a simpler time. All right. Well, uh, that 76 00:04:31,839 --> 00:04:35,320 Speaker 1: brings us um quite nicely to our guest for this episode, 77 00:04:35,600 --> 00:04:39,560 Speaker 1: I suppose. So we have Stephanie Sancheva. She's a professor 78 00:04:39,640 --> 00:04:43,600 Speaker 1: of economics over at Harvard. She's done a lot of 79 00:04:43,640 --> 00:04:48,640 Speaker 1: really interesting research on all types of policy, but specifically, 80 00:04:48,640 --> 00:04:53,040 Speaker 1: she did a very good paper about taxes. Recently. She also, 81 00:04:53,320 --> 00:04:58,320 Speaker 1: I think, just won the Elaine Bennett Research Prize, very 82 00:04:58,400 --> 00:05:01,760 Speaker 1: prestigious award in economics, and I think she's also been 83 00:05:01,800 --> 00:05:05,599 Speaker 1: tipped as a future Nobel Prize winner. Hopefully we're not 84 00:05:05,720 --> 00:05:08,920 Speaker 1: chinxing it by saying that. But Stephanie, thank you so 85 00:05:08,920 --> 00:05:12,160 Speaker 1: how much for coming on. Thank you. It's my pleasure 86 00:05:12,200 --> 00:05:15,600 Speaker 1: to be here. So I guess just to begin with. 87 00:05:15,880 --> 00:05:19,160 Speaker 1: You know, you published this paper, I think it was 88 00:05:19,200 --> 00:05:23,640 Speaker 1: back in August, and it was called Understanding Tax Policy 89 00:05:23,839 --> 00:05:27,680 Speaker 1: How do People Reason? And the really interesting thing about 90 00:05:27,720 --> 00:05:31,440 Speaker 1: this was you went out and you did a really 91 00:05:31,920 --> 00:05:37,800 Speaker 1: massive and detailed survey about how people individually feel about taxes. 92 00:05:38,200 --> 00:05:41,279 Speaker 1: Why did you decide to take that approach? Yeah, So 93 00:05:41,320 --> 00:05:44,760 Speaker 1: when I decided to do this project, it came from 94 00:05:44,800 --> 00:05:48,640 Speaker 1: having experience with other such types of research where I've 95 00:05:48,680 --> 00:05:52,160 Speaker 1: been trying to understand how we as citizens think about 96 00:05:52,279 --> 00:05:55,840 Speaker 1: our public policies, the economy and society. You know, how 97 00:05:55,880 --> 00:05:58,839 Speaker 1: we reason, what we perceive as fair, what shapes our views. 98 00:05:59,360 --> 00:06:02,120 Speaker 1: I think this is very important both our researchers and 99 00:06:02,120 --> 00:06:05,880 Speaker 1: then for policymakers to understand in order to design policies 100 00:06:05,920 --> 00:06:08,800 Speaker 1: that are better in line with our views of society. 101 00:06:08,920 --> 00:06:11,360 Speaker 1: And I found it for this the Social Economics Lab 102 00:06:11,360 --> 00:06:15,120 Speaker 1: at Harvard, where we do these large scale social economic 103 00:06:15,200 --> 00:06:18,640 Speaker 1: surveys um sometimes on several countries to try and see 104 00:06:18,920 --> 00:06:23,200 Speaker 1: how people reason, um, how people understand things, and you know, 105 00:06:23,240 --> 00:06:25,599 Speaker 1: the key idea is, basically, we need to listen more 106 00:06:25,680 --> 00:06:29,960 Speaker 1: to people. Um. And so this project on tax policy 107 00:06:30,160 --> 00:06:32,039 Speaker 1: came from the idea that you hear a lot of 108 00:06:32,040 --> 00:06:35,440 Speaker 1: things in the policy debate. Some of them economists would 109 00:06:36,000 --> 00:06:39,200 Speaker 1: say are accurate, others you may say are quite misleading. 110 00:06:39,680 --> 00:06:41,919 Speaker 1: And so I was very curious, what are sort of 111 00:06:41,960 --> 00:06:45,400 Speaker 1: the mental maps, the mental models people use when they 112 00:06:45,400 --> 00:06:48,800 Speaker 1: decide what tax policy to support, what tax policy to 113 00:06:48,880 --> 00:06:53,440 Speaker 1: vote for. So do people ever like higher tex So 114 00:06:53,920 --> 00:06:58,320 Speaker 1: there's a lot of complex considerations that go into thinking 115 00:06:58,320 --> 00:07:01,880 Speaker 1: about taxes for people. UM. What I find is actually 116 00:07:01,880 --> 00:07:05,279 Speaker 1: that the key factor in people's minds is how fair 117 00:07:05,440 --> 00:07:09,240 Speaker 1: is the tax system? Um. People care first and foremost 118 00:07:09,360 --> 00:07:13,320 Speaker 1: about fairness. And what's interesting is that, of course fairness 119 00:07:13,360 --> 00:07:15,960 Speaker 1: is in the eye of the beholder. So do people 120 00:07:16,000 --> 00:07:19,160 Speaker 1: like high taxes? Yes, for some people who believe that 121 00:07:19,200 --> 00:07:22,240 Speaker 1: it's actually unfair to have a lot of income inequality 122 00:07:22,520 --> 00:07:26,160 Speaker 1: or a lot of wealth inequality. For those people, higher 123 00:07:26,200 --> 00:07:29,920 Speaker 1: taxes would actually be considered fair. And so perhaps the 124 00:07:30,400 --> 00:07:33,400 Speaker 1: you know, the complexity here is that fairness truly is 125 00:07:33,480 --> 00:07:36,000 Speaker 1: in the eye of the beholder and means very different things. 126 00:07:36,000 --> 00:07:40,200 Speaker 1: To different people. So one of the interesting things about 127 00:07:40,240 --> 00:07:44,320 Speaker 1: your paper is that you also, um, do this research 128 00:07:44,440 --> 00:07:47,840 Speaker 1: and you sort of talk to people along partisan lines. 129 00:07:47,960 --> 00:07:53,080 Speaker 1: So I'm curious, does the idea of fairness change substantially 130 00:07:53,120 --> 00:07:58,200 Speaker 1: depending on whether you're Republican or Democrat. So our ideas 131 00:07:58,200 --> 00:08:02,720 Speaker 1: about taxes actually look very divided along political lines, and 132 00:08:02,760 --> 00:08:05,360 Speaker 1: not just in the final policy views. If you want 133 00:08:05,400 --> 00:08:08,480 Speaker 1: whether we want higher lower taxes, um, that we we 134 00:08:08,560 --> 00:08:11,320 Speaker 1: already knew and we can easily see. But actually, at 135 00:08:11,400 --> 00:08:14,920 Speaker 1: every step of the reasoning about taxes, uh, they're big 136 00:08:14,960 --> 00:08:19,720 Speaker 1: political divides. So what are the considerations if you want 137 00:08:19,880 --> 00:08:21,960 Speaker 1: that people that people have in mind? And how are 138 00:08:21,960 --> 00:08:25,160 Speaker 1: they divided along partisan lines? Well, the first thing people 139 00:08:25,680 --> 00:08:28,440 Speaker 1: care about is what will be the economic effects of 140 00:08:28,520 --> 00:08:32,000 Speaker 1: raising taxes or lowering taxes. The second thing they care 141 00:08:32,040 --> 00:08:35,640 Speaker 1: about is who will benefit, who will gain, who will lose? 142 00:08:36,240 --> 00:08:39,439 Speaker 1: And then the fanness concerns I would summarize us, how 143 00:08:39,480 --> 00:08:42,720 Speaker 1: do we wait the gains and losses? Um, how much 144 00:08:43,320 --> 00:08:45,480 Speaker 1: weight do we put on the losers? How much weight 145 00:08:45,480 --> 00:08:48,160 Speaker 1: do we put on the winners? Here, people also care 146 00:08:48,160 --> 00:08:51,520 Speaker 1: about their views of the government, Um, how the government 147 00:08:51,520 --> 00:08:54,760 Speaker 1: will spend that revenue is the government efficient, does the 148 00:08:54,800 --> 00:08:58,679 Speaker 1: government have a lot of waste um? And then finally, 149 00:08:58,720 --> 00:09:01,960 Speaker 1: people also care out what they already know on the 150 00:09:02,000 --> 00:09:05,400 Speaker 1: current tax system. And so at each of these steps 151 00:09:05,440 --> 00:09:08,640 Speaker 1: there's actually big political divides. So to make this simple, 152 00:09:09,400 --> 00:09:12,520 Speaker 1: if you're more on the left, on the Democrats side, 153 00:09:12,960 --> 00:09:16,400 Speaker 1: then you actually think taxes have lower economic costs, so 154 00:09:16,480 --> 00:09:19,800 Speaker 1: higher taxes don't hurt the economy as much. You also 155 00:09:19,840 --> 00:09:23,440 Speaker 1: think that in general, tax cuts you know at the 156 00:09:23,720 --> 00:09:27,560 Speaker 1: at the top will really mainly benefit higher income people, 157 00:09:27,960 --> 00:09:29,880 Speaker 1: as opposed to if you're on the right, where you 158 00:09:29,920 --> 00:09:33,480 Speaker 1: believe in trickle down, namely that tax cuts on high 159 00:09:33,480 --> 00:09:36,400 Speaker 1: incomes will benefit everyone else as well, it would be 160 00:09:36,440 --> 00:09:39,920 Speaker 1: the tide that lifts all boats. Um. If you're on 161 00:09:39,960 --> 00:09:41,720 Speaker 1: the left, you also tend to think that it's much 162 00:09:41,720 --> 00:09:45,800 Speaker 1: more unfair to have so much income inequality or wealth inequality, 163 00:09:46,040 --> 00:09:50,439 Speaker 1: and you believe fundamentally people are not entitled to infinitely 164 00:09:50,520 --> 00:09:53,000 Speaker 1: high incomes and that it's fair to tax away at 165 00:09:53,040 --> 00:09:57,679 Speaker 1: least part of it. What's perhaps most striking is that 166 00:09:58,120 --> 00:10:02,760 Speaker 1: there is artisan divide even on the perception of reality. 167 00:10:02,880 --> 00:10:06,720 Speaker 1: That's what I call polarization of reality, which is even 168 00:10:06,760 --> 00:10:09,720 Speaker 1: about the current tax system how high is the top 169 00:10:09,720 --> 00:10:12,240 Speaker 1: tax rate, where does the top tax bracket start, how 170 00:10:12,320 --> 00:10:15,560 Speaker 1: high is these stay tax et cetera. Even there there's 171 00:10:15,600 --> 00:10:20,559 Speaker 1: actually uh divergence along political lines. So in a nutshell, 172 00:10:20,960 --> 00:10:23,520 Speaker 1: people who are on the left tend to think taxes 173 00:10:23,679 --> 00:10:28,160 Speaker 1: are lower, less progressive, there's more incoming equality than people 174 00:10:28,200 --> 00:10:31,280 Speaker 1: on the right do. And what is striking is that 175 00:10:31,320 --> 00:10:34,240 Speaker 1: these are things that one can actually look up. Um, 176 00:10:34,280 --> 00:10:36,160 Speaker 1: this is not a matter of opinion. This is a 177 00:10:36,160 --> 00:10:41,240 Speaker 1: matter of current factual realities. So I'm I want to 178 00:10:41,240 --> 00:10:44,200 Speaker 1: talk a little bit more. You know, I'm curious obviously 179 00:10:44,200 --> 00:10:45,880 Speaker 1: about what you found, but I want to talk a 180 00:10:45,920 --> 00:10:50,240 Speaker 1: little bit more about your methodology and your approach and 181 00:10:50,280 --> 00:10:53,280 Speaker 1: why you think the survey going out and asking people 182 00:10:53,960 --> 00:10:57,040 Speaker 1: is a good idea, Because I'm curious if, like, you know, 183 00:10:57,240 --> 00:10:59,800 Speaker 1: someone came to me and said, like, oh, what are 184 00:10:59,840 --> 00:11:02,280 Speaker 1: your use on the tax system or why do you 185 00:11:02,320 --> 00:11:05,240 Speaker 1: support higher lower taxes? You know, I might come up 186 00:11:05,240 --> 00:11:08,960 Speaker 1: with some thoughtful thing about fairness because I'm talking to 187 00:11:09,040 --> 00:11:11,920 Speaker 1: someone and I want to sound reasonable and I want 188 00:11:11,920 --> 00:11:14,440 Speaker 1: to say, oh, well, it's very important for me to 189 00:11:14,559 --> 00:11:16,760 Speaker 1: know that it's being spent well, and I want to 190 00:11:16,800 --> 00:11:21,000 Speaker 1: say smart sounding sophisticated things. But then then then they leave, 191 00:11:21,200 --> 00:11:23,680 Speaker 1: and then I'm thinking and just want lower taxes because 192 00:11:23,720 --> 00:11:26,440 Speaker 1: I want to keep more money. So I'm curious about 193 00:11:26,480 --> 00:11:29,760 Speaker 1: what you see is the advantages, the costs, and benefit 194 00:11:30,240 --> 00:11:33,839 Speaker 1: of the survey method for getting people's opinions on what 195 00:11:33,880 --> 00:11:38,240 Speaker 1: you just described are very political questions. This is a 196 00:11:38,280 --> 00:11:41,160 Speaker 1: great question, And let me give a bit of background 197 00:11:41,160 --> 00:11:44,280 Speaker 1: to this methodology, so you know, the key idea is 198 00:11:44,280 --> 00:11:48,320 Speaker 1: really that it's important to get into people's minds, into 199 00:11:48,360 --> 00:11:52,040 Speaker 1: our minds of citizens, and there are things which we 200 00:11:52,120 --> 00:11:55,360 Speaker 1: cannot see in other data and that we cannot extract 201 00:11:55,440 --> 00:11:59,680 Speaker 1: with other methods. And these are these invisible things like perceptions, 202 00:12:00,040 --> 00:12:04,360 Speaker 1: these attitudes, reasoning, and so we as economists have many 203 00:12:04,400 --> 00:12:08,319 Speaker 1: tools based on large scale data sets, but these invisible 204 00:12:08,360 --> 00:12:11,880 Speaker 1: things will still not be seen in these other data sets. 205 00:12:11,920 --> 00:12:17,400 Speaker 1: So in some sense, directly asking people is perhaps the 206 00:12:17,440 --> 00:12:20,200 Speaker 1: best way to go here. What's important is, of course, 207 00:12:20,400 --> 00:12:23,000 Speaker 1: that these surveys are not just you know, opinion polls 208 00:12:23,040 --> 00:12:27,480 Speaker 1: on the street, but actually carefully designed, rigorous research tools. 209 00:12:27,520 --> 00:12:32,559 Speaker 1: So they're done online in a way that's very interactive, intuitive, 210 00:12:32,960 --> 00:12:37,400 Speaker 1: walking people through a controlled order series of questions. Uh 211 00:12:37,400 --> 00:12:40,480 Speaker 1: and they're done in a completely anonymous way, so there's 212 00:12:40,480 --> 00:12:43,640 Speaker 1: absolutely no social pressure. Um. You can take it on 213 00:12:43,679 --> 00:12:46,080 Speaker 1: your phone, you can take it alone in front of 214 00:12:46,080 --> 00:12:48,760 Speaker 1: your browser. There is no surveyor in front of you, 215 00:12:49,200 --> 00:12:53,920 Speaker 1: so there's actually very little mispers, very little incentive to misreport. 216 00:12:54,520 --> 00:12:57,080 Speaker 1: Let me just resay that sentence. There's actually very little 217 00:12:57,320 --> 00:13:01,640 Speaker 1: incentive to misreport um your opinions, as there is absolutely 218 00:13:01,640 --> 00:13:05,319 Speaker 1: no social pressure around it. Now, the design is very critical, 219 00:13:05,880 --> 00:13:10,080 Speaker 1: so I go through several blocks here too get a 220 00:13:10,120 --> 00:13:12,600 Speaker 1: sense of really what's going on in people's minds. And 221 00:13:12,640 --> 00:13:15,600 Speaker 1: I actually start with what you suggested, which is a 222 00:13:15,720 --> 00:13:19,400 Speaker 1: plane open ended question to get actually people's gut reaction, 223 00:13:19,600 --> 00:13:22,800 Speaker 1: which is, what are your main considerations about taxes? And 224 00:13:22,800 --> 00:13:25,040 Speaker 1: then I can analyze these answers, you know, in a 225 00:13:25,080 --> 00:13:28,920 Speaker 1: freely open ended way, and it's very clear what sort 226 00:13:28,920 --> 00:13:33,400 Speaker 1: of considerations come out. Everybody mentions fairness, people mentioned the 227 00:13:33,400 --> 00:13:37,040 Speaker 1: middle class a lot, People worry about loopholes. But then 228 00:13:37,080 --> 00:13:40,440 Speaker 1: I can drill down by walking people through more detailed questions, 229 00:13:40,760 --> 00:13:44,160 Speaker 1: so on the mechanisms of taxes. For instance, if taxes 230 00:13:44,200 --> 00:13:48,360 Speaker 1: increased on higher incomes, what would you think the effects 231 00:13:48,360 --> 00:13:52,000 Speaker 1: would be? Do you think higher incomes with less entrepreneurial 232 00:13:52,320 --> 00:13:57,400 Speaker 1: save less move states, um, workless great less jobs, et cetera. 233 00:13:57,880 --> 00:13:59,959 Speaker 1: And so you can want people through all these detail 234 00:14:00,160 --> 00:14:03,800 Speaker 1: reasonings and elicit much more detailed you know, beyond the 235 00:14:03,840 --> 00:14:10,680 Speaker 1: gut reaction responses, and so taken together, this relatively long 236 00:14:10,800 --> 00:14:14,120 Speaker 1: and well designed survey actually really shed some good light 237 00:14:14,160 --> 00:14:31,240 Speaker 1: into what's going on in people's heads. One of the 238 00:14:31,320 --> 00:14:34,840 Speaker 1: things that you did, UM in the survey was you also, 239 00:14:35,440 --> 00:14:38,960 Speaker 1: I think you showed people short videos that kind of 240 00:14:39,040 --> 00:14:44,040 Speaker 1: explain how tax policy actually works. Could you maybe talk 241 00:14:44,280 --> 00:14:49,720 Speaker 1: a little bit about that aspect of UM of the research. Yes. 242 00:14:49,920 --> 00:14:53,080 Speaker 1: So my idea here was to see whether if we 243 00:14:53,160 --> 00:14:59,080 Speaker 1: actually showed people simple explanatory videos, which are fully neutral, 244 00:14:59,320 --> 00:15:02,560 Speaker 1: non part is and pedagogical, the way you may see 245 00:15:02,600 --> 00:15:07,040 Speaker 1: in a plain introductory economics course, whether that could actually 246 00:15:07,040 --> 00:15:11,920 Speaker 1: help improve understanding of taxes. And I designed these videos 247 00:15:11,960 --> 00:15:16,680 Speaker 1: to be UM, short and fun hopefully easy to understand, 248 00:15:17,280 --> 00:15:21,880 Speaker 1: and I simply vary the frame UM with which with 249 00:15:21,920 --> 00:15:25,040 Speaker 1: which I show them. So, for instance, one video will 250 00:15:25,080 --> 00:15:29,840 Speaker 1: focus mainly on the distributional consequences of taxes, essentially who 251 00:15:29,880 --> 00:15:32,480 Speaker 1: gains who loses, you know, to the best of our 252 00:15:32,760 --> 00:15:36,480 Speaker 1: economics knowledge today. The other will focus only on the 253 00:15:36,520 --> 00:15:40,240 Speaker 1: economic costs of benefits, So what would be the effects 254 00:15:40,280 --> 00:15:43,640 Speaker 1: on the economy, um, will output be lower? Will there 255 00:15:43,680 --> 00:15:47,120 Speaker 1: be economic costs? And then the third one actually brings 256 00:15:47,160 --> 00:15:50,360 Speaker 1: these two together, and very much like economists would think, 257 00:15:50,720 --> 00:15:53,120 Speaker 1: points out that there's always a trade off between the 258 00:15:53,160 --> 00:15:56,240 Speaker 1: costs and benefit of taxes. The benefits in terms of 259 00:15:56,600 --> 00:16:01,000 Speaker 1: raising revenues possibly re distributing income, you know, as much 260 00:16:01,000 --> 00:16:05,280 Speaker 1: as is in line with your fairness and distributional inclinations. 261 00:16:05,360 --> 00:16:08,920 Speaker 1: And there's the economic costs because taxes always change people's 262 00:16:08,960 --> 00:16:12,520 Speaker 1: behaviors to some extent or company's behaviors, and so entails 263 00:16:12,520 --> 00:16:15,160 Speaker 1: some economic costs, and that the right tax system is 264 00:16:15,200 --> 00:16:19,320 Speaker 1: the one that actually balances these costs and benefits. And 265 00:16:19,360 --> 00:16:21,920 Speaker 1: what I see is that these videos are actually quite effective, 266 00:16:22,480 --> 00:16:28,280 Speaker 1: although they're pretty short, they're actually quite effective in making people, uh, 267 00:16:28,480 --> 00:16:30,520 Speaker 1: you know, more aware of the tax system and also 268 00:16:30,560 --> 00:16:35,040 Speaker 1: more supportive of progressive income taxes and more supportive also 269 00:16:35,120 --> 00:16:38,560 Speaker 1: of the state tax. And I I noticed that the 270 00:16:38,720 --> 00:16:42,760 Speaker 1: arguments that actually people care most about, very much in 271 00:16:42,800 --> 00:16:45,640 Speaker 1: line with what I said earlier, are really the distributional 272 00:16:45,680 --> 00:16:49,400 Speaker 1: impacts and the fairness impact. So when people see the 273 00:16:49,480 --> 00:16:53,440 Speaker 1: distributional impacts of taxes, how it could actually help you know, 274 00:16:54,000 --> 00:16:57,320 Speaker 1: lower income people or the middle class, uh, and actually 275 00:16:57,320 --> 00:17:01,000 Speaker 1: smooth the income distribution a little bit. Even if they 276 00:17:01,240 --> 00:17:04,440 Speaker 1: become more aware of the economic costs as well, on balance, 277 00:17:04,720 --> 00:17:07,640 Speaker 1: they tend to then side more with being in support 278 00:17:07,640 --> 00:17:12,520 Speaker 1: of progressive taxes. So you mentioned estate taxes just then. 279 00:17:12,720 --> 00:17:15,480 Speaker 1: I'm curious, did you find out the way people feel 280 00:17:15,520 --> 00:17:19,040 Speaker 1: about estate taxes is different to the way they feel 281 00:17:19,080 --> 00:17:22,520 Speaker 1: about income taxes or I don't know. I don't think 282 00:17:22,560 --> 00:17:25,920 Speaker 1: your paper went into corporate taxes, but I'm just curious 283 00:17:26,240 --> 00:17:30,399 Speaker 1: what your take is on on variations and how people 284 00:17:30,440 --> 00:17:35,240 Speaker 1: think about different types of taxes. So how do people 285 00:17:35,280 --> 00:17:38,080 Speaker 1: think about different types of taxes? In the paper, I 286 00:17:38,119 --> 00:17:42,000 Speaker 1: look at two major tools on the personal tax side, 287 00:17:42,000 --> 00:17:46,000 Speaker 1: which are um income taxes and the estate tax, which 288 00:17:46,040 --> 00:17:49,280 Speaker 1: is a tax that is paid when someone passes away 289 00:17:49,320 --> 00:17:52,800 Speaker 1: on the estate they pass on UM to their heirs 290 00:17:52,920 --> 00:17:56,720 Speaker 1: and UM. I think that for other types of taxes, 291 00:17:57,119 --> 00:18:00,879 Speaker 1: the the major considerations, which is, you know, what are 292 00:18:00,920 --> 00:18:03,359 Speaker 1: your finn as views will also be probably the most 293 00:18:03,440 --> 00:18:06,800 Speaker 1: important ones. UM in the case of income in the 294 00:18:06,880 --> 00:18:11,200 Speaker 1: state taxes, the biggest difference is that people are actually 295 00:18:11,720 --> 00:18:15,080 Speaker 1: much more unaware of how these state tax works. Uh. 296 00:18:15,119 --> 00:18:19,040 Speaker 1: The state tax is a very unpopular tax in the US. 297 00:18:19,080 --> 00:18:21,879 Speaker 1: It's sometimes called the death tax, which is obviously not 298 00:18:21,960 --> 00:18:25,879 Speaker 1: a not a great name, and it's very disliked. UM. 299 00:18:26,000 --> 00:18:28,240 Speaker 1: What I find is that it's very disliked because people 300 00:18:28,240 --> 00:18:31,840 Speaker 1: believe it's ultimately a double tax, which is a taxes 301 00:18:31,920 --> 00:18:35,120 Speaker 1: income that has already been taxed at some point. Uh. 302 00:18:35,119 --> 00:18:39,200 Speaker 1: And it's also very unpopular because it's very misunderstood. So 303 00:18:39,320 --> 00:18:43,119 Speaker 1: for instance, UM, in general, respondents think that around a 304 00:18:43,240 --> 00:18:45,800 Speaker 1: third of all estates will end up paying these state 305 00:18:45,840 --> 00:18:49,320 Speaker 1: tax and that couldn't be further from the truth. In fact, 306 00:18:49,760 --> 00:18:52,439 Speaker 1: less than one in thousand estates will be subject to 307 00:18:52,440 --> 00:18:55,200 Speaker 1: these state tax So it's actually a tax that gives 308 00:18:55,240 --> 00:18:58,560 Speaker 1: in very high in the wealth distribution that you may 309 00:18:58,560 --> 00:19:02,000 Speaker 1: pass on, and people are unaware of that. UM. So 310 00:19:02,119 --> 00:19:04,720 Speaker 1: they believe, for instance, the chances that they are people 311 00:19:04,800 --> 00:19:07,080 Speaker 1: they know or people like them will end up paying 312 00:19:07,080 --> 00:19:11,919 Speaker 1: it is much higher than it actually is. But even there, 313 00:19:11,960 --> 00:19:15,760 Speaker 1: the major considerations relate to fairness, and the state tax 314 00:19:15,840 --> 00:19:19,959 Speaker 1: is actually a great example to illustrate how complex fans 315 00:19:20,040 --> 00:19:23,080 Speaker 1: views can be and you are, you know, the listeners 316 00:19:23,119 --> 00:19:26,040 Speaker 1: can can think about themselves. How do you feel about 317 00:19:26,080 --> 00:19:29,920 Speaker 1: the fairness of taxing away wealth that's passed on from 318 00:19:30,000 --> 00:19:34,000 Speaker 1: parents to their children. Well, it's actually a very thorny 319 00:19:34,040 --> 00:19:37,960 Speaker 1: ethical issue because if you take the perspective of children, 320 00:19:38,680 --> 00:19:42,720 Speaker 1: then many people across the political spectrum agree that it's 321 00:19:42,840 --> 00:19:46,000 Speaker 1: unfair for children, you know, just by virtue of being 322 00:19:46,000 --> 00:19:49,720 Speaker 1: born in wealthier families to start with better amenities and life, 323 00:19:49,760 --> 00:19:53,439 Speaker 1: start with more advantages in life, and then receive higher inheritances. 324 00:19:53,600 --> 00:19:56,679 Speaker 1: So many people taking the perspective of children would feel 325 00:19:57,400 --> 00:19:59,639 Speaker 1: that this is unfair and that we like equality of 326 00:19:59,640 --> 00:20:03,959 Speaker 1: a poor unity. Um, we like they give everybody equal chances. 327 00:20:04,080 --> 00:20:06,760 Speaker 1: And so if you just think about the children's perspective, 328 00:20:07,160 --> 00:20:10,840 Speaker 1: most people actually agree that it's fair to try to 329 00:20:10,920 --> 00:20:13,280 Speaker 1: level the playing field a little bit by having an 330 00:20:13,359 --> 00:20:16,520 Speaker 1: estate tax. But then flip it around and take the 331 00:20:16,560 --> 00:20:20,399 Speaker 1: perspective of parents. So parents, you know, who have perhaps 332 00:20:20,400 --> 00:20:24,080 Speaker 1: worked hard and saved in order to transmit wealth to 333 00:20:24,119 --> 00:20:27,600 Speaker 1: their children. Once we take that perspective there, people feel 334 00:20:27,640 --> 00:20:31,359 Speaker 1: quite differently. They feel, oh, it's actually perhaps not that 335 00:20:31,400 --> 00:20:34,320 Speaker 1: fair to tax away the wealth of parents who have 336 00:20:34,480 --> 00:20:37,399 Speaker 1: worked so hard to give money to their children. And 337 00:20:37,440 --> 00:20:40,359 Speaker 1: by the way, even if parents have themselves inherited and 338 00:20:40,680 --> 00:20:43,640 Speaker 1: we're you know, already wealthy when they were young, even 339 00:20:43,680 --> 00:20:46,119 Speaker 1: there people think it's not great from the perspective of 340 00:20:46,119 --> 00:20:48,720 Speaker 1: the parents attacks this away. And so this is in 341 00:20:48,880 --> 00:20:53,680 Speaker 1: conflict with each other because these two perspectives are fundamentally 342 00:20:53,760 --> 00:20:56,720 Speaker 1: opposing each other. And so in the end, people have 343 00:20:56,800 --> 00:21:00,800 Speaker 1: to face this ethical dynama. And what I see is 344 00:21:00,840 --> 00:21:03,800 Speaker 1: that on balance, in the end, people who are more 345 00:21:03,840 --> 00:21:07,280 Speaker 1: on the left, on the Democrats side, tend to on 346 00:21:07,440 --> 00:21:11,720 Speaker 1: balance say, okay, I'd rather have less inequality among children. 347 00:21:11,800 --> 00:21:14,760 Speaker 1: I'd rather have more equality of opportunity among children, even 348 00:21:14,800 --> 00:21:17,320 Speaker 1: if that means I need to penalize some parents and 349 00:21:17,359 --> 00:21:20,160 Speaker 1: tax away part of their states. And on the right, 350 00:21:20,200 --> 00:21:24,320 Speaker 1: people tend to side perhaps more with the parents and thinking, well, 351 00:21:24,359 --> 00:21:28,000 Speaker 1: it's too bad there will be unequal opportunities and inequality 352 00:21:28,040 --> 00:21:31,919 Speaker 1: for children. But I still prefer to leave parents, you know, 353 00:21:32,080 --> 00:21:34,000 Speaker 1: the right to pass on their wealth to their children 354 00:21:34,080 --> 00:21:39,160 Speaker 1: tax free. So how much the upshot of your research 355 00:21:39,840 --> 00:21:44,040 Speaker 1: is essentially applicable to the political language that has to 356 00:21:44,080 --> 00:21:48,639 Speaker 1: be used in any campaign or policy debate. So people 357 00:21:48,720 --> 00:21:52,240 Speaker 1: have their views. I want to raise taxes, who want 358 00:21:52,240 --> 00:21:56,160 Speaker 1: to cut taxes? How much does your research essentially sort 359 00:21:56,200 --> 00:21:59,600 Speaker 1: of inform for either side the sort of framing that 360 00:21:59,720 --> 00:22:05,400 Speaker 1: can be used to gather public support. So I want 361 00:22:05,400 --> 00:22:08,960 Speaker 1: to be very clear about my motivations here. UM. My 362 00:22:09,080 --> 00:22:13,359 Speaker 1: goal is to actually try and help people understand the 363 00:22:13,440 --> 00:22:16,320 Speaker 1: workings of taxes better. And for that the first step 364 00:22:16,400 --> 00:22:20,679 Speaker 1: is actually you know the diagnostics state, which is where 365 00:22:20,720 --> 00:22:25,840 Speaker 1: does the disagreement lie, Where is the misunderstanding hidden, what 366 00:22:26,200 --> 00:22:29,760 Speaker 1: is incoherent perhaps in the reasoning or in the chain 367 00:22:30,000 --> 00:22:33,560 Speaker 1: of reasoning. And so this is why I'm doing this project, 368 00:22:33,600 --> 00:22:37,720 Speaker 1: to actually identify how people think about tax policy. The 369 00:22:37,800 --> 00:22:42,159 Speaker 1: goal also by showing, for instance, these instructional videos, is 370 00:22:42,200 --> 00:22:47,080 Speaker 1: to really see whether explanations improving understanding can help people. 371 00:22:47,720 --> 00:22:52,040 Speaker 1: And I have, you know, no wish to um encourage 372 00:22:52,040 --> 00:22:55,639 Speaker 1: people in one direction or the other, especially when it 373 00:22:55,680 --> 00:22:58,679 Speaker 1: comes to fanness considerations, which have very much you know, 374 00:22:58,760 --> 00:23:03,080 Speaker 1: your own individual or our own social you know, prerogative 375 00:23:03,160 --> 00:23:06,639 Speaker 1: to have. But it's actually really about improving understanding. And 376 00:23:06,680 --> 00:23:10,760 Speaker 1: I think that's very important because many people sometimes actually 377 00:23:10,760 --> 00:23:15,840 Speaker 1: from disadvantage groups by not understanding what policies do are 378 00:23:15,880 --> 00:23:18,240 Speaker 1: not able to assess what benefits or costs they will 379 00:23:18,240 --> 00:23:21,600 Speaker 1: have to them, And I think giving people the tools 380 00:23:21,600 --> 00:23:24,320 Speaker 1: to understand that means them being able to stand up 381 00:23:24,359 --> 00:23:29,040 Speaker 1: more for themselves and make better decisions for themselves. And 382 00:23:29,160 --> 00:23:32,280 Speaker 1: you know, perhaps which we're thinking, but I'm also hoping 383 00:23:32,359 --> 00:23:34,960 Speaker 1: that for many of these things, we can approach it 384 00:23:35,000 --> 00:23:41,600 Speaker 1: from a more objective, nonpartisan angle and actually, you know, 385 00:23:42,359 --> 00:23:48,960 Speaker 1: improve understanding rather than foster political differences. So I think 386 00:23:49,000 --> 00:23:51,159 Speaker 1: your survey just on that point, Your survey is a 387 00:23:51,240 --> 00:23:54,560 Speaker 1: sort of snapshot in time. But do you get the 388 00:23:54,680 --> 00:24:00,800 Speaker 1: sense that people's views on taxes have solidified more along 389 00:24:00,880 --> 00:24:04,840 Speaker 1: partisan lines in recent years? Like do you think had 390 00:24:04,880 --> 00:24:07,720 Speaker 1: you've done this survey twenty or thirty years ago, do 391 00:24:07,760 --> 00:24:11,760 Speaker 1: you think it would have shown as stark split between attitudes. 392 00:24:14,400 --> 00:24:18,200 Speaker 1: It's a really hard question to say whether polarization has 393 00:24:18,240 --> 00:24:21,120 Speaker 1: increased or not in the US. It depends on the issues, 394 00:24:21,720 --> 00:24:26,159 Speaker 1: and there isn't you know, so much detailed like the 395 00:24:26,160 --> 00:24:29,000 Speaker 1: way we would do today survey data going back in 396 00:24:29,080 --> 00:24:32,159 Speaker 1: time to be able to say this. However, what is 397 00:24:32,200 --> 00:24:37,919 Speaker 1: clear is that because there's partisan gaps at every single step, 398 00:24:37,960 --> 00:24:41,359 Speaker 1: including on the views of reality, uh, they are clearly 399 00:24:41,440 --> 00:24:45,800 Speaker 1: quite deeply anchored, and so I think it's um. It's 400 00:24:46,040 --> 00:24:49,119 Speaker 1: unsurprising in the end, going through these chains of reasonings 401 00:24:49,320 --> 00:24:52,439 Speaker 1: that we have very different views about tax policy on 402 00:24:52,480 --> 00:24:55,800 Speaker 1: both sides of the political spectrum. Now, this is not 403 00:24:55,880 --> 00:24:58,959 Speaker 1: true for all policies. This is only part of the 404 00:24:59,680 --> 00:25:02,480 Speaker 1: of the big research agenda, and I've looked at other 405 00:25:02,520 --> 00:25:06,919 Speaker 1: policies like health insurance or trade policy, and partisan gaps 406 00:25:06,960 --> 00:25:10,720 Speaker 1: are actually um not that large or look very different 407 00:25:10,840 --> 00:25:15,080 Speaker 1: on other policies. So on health policy, for instance, people 408 00:25:15,080 --> 00:25:18,480 Speaker 1: on the left and the right actually reason very similarly 409 00:25:18,600 --> 00:25:23,840 Speaker 1: about the economic effects of health insurance, of the benefits 410 00:25:23,920 --> 00:25:27,240 Speaker 1: in terms of distribution, or helping the sick, or helping 411 00:25:27,240 --> 00:25:31,679 Speaker 1: lower income families. The reasoning is actually extremely similar on 412 00:25:31,760 --> 00:25:35,360 Speaker 1: both sides of the political spectrum. However, once we go 413 00:25:35,520 --> 00:25:38,880 Speaker 1: to the final policy views, and for instance, ask would 414 00:25:38,880 --> 00:25:42,000 Speaker 1: you support, you know, a single payer health insurance, would 415 00:25:42,040 --> 00:25:45,000 Speaker 1: you support a version of Medicare for all, they're actually 416 00:25:45,320 --> 00:25:49,400 Speaker 1: regardless of the previous reasoning, people revert very much back 417 00:25:49,440 --> 00:25:52,639 Speaker 1: to party lines um, and so a gap appears in 418 00:25:52,680 --> 00:25:55,760 Speaker 1: the final policy views. Although it's very hard to detect 419 00:25:55,800 --> 00:25:59,480 Speaker 1: any difference in how people actually reason about these policies. 420 00:26:01,160 --> 00:26:04,400 Speaker 1: That's super interesting to me. I mean, one of the questions, 421 00:26:04,400 --> 00:26:06,040 Speaker 1: and you know it comes up in all sorts of 422 00:26:06,040 --> 00:26:10,480 Speaker 1: political discussions, is do people really ever change their minds 423 00:26:10,920 --> 00:26:13,720 Speaker 1: when presented with new evidence? So maybe some people have 424 00:26:13,840 --> 00:26:15,520 Speaker 1: some have some idea, they're like, oh, I think the 425 00:26:15,560 --> 00:26:18,199 Speaker 1: tax rate is here, turns out the tax rate is 426 00:26:18,280 --> 00:26:21,920 Speaker 1: much lower. Did they actually change their minds on policy? 427 00:26:22,040 --> 00:26:25,159 Speaker 1: Or do they come up with some some new reason? 428 00:26:25,240 --> 00:26:29,280 Speaker 1: Does the mind automatically backfill some new sort of empirical 429 00:26:29,320 --> 00:26:33,320 Speaker 1: explanation to support what is uh, They're they're sort of 430 00:26:33,320 --> 00:26:37,919 Speaker 1: a political leaning. So obviously our brains are very complex, 431 00:26:38,280 --> 00:26:42,120 Speaker 1: uh instruments, and we tend to have a lot of biases. 432 00:26:42,320 --> 00:26:44,960 Speaker 1: And I say we because it really affects all of us. 433 00:26:45,760 --> 00:26:48,600 Speaker 1: But I think it depends very much on the issue 434 00:26:48,640 --> 00:26:54,240 Speaker 1: whether information can improve or change people's minds. So in 435 00:26:54,280 --> 00:26:57,600 Speaker 1: the case of tax policy, as I explained, actually people 436 00:26:57,640 --> 00:27:03,520 Speaker 1: are open. It seems to explanatory videos or clear but 437 00:27:03,640 --> 00:27:07,280 Speaker 1: a logical explanation of how tax policy works. That's not 438 00:27:07,359 --> 00:27:11,360 Speaker 1: true for all issues. So I've looked at issues like immigration, 439 00:27:11,920 --> 00:27:16,840 Speaker 1: um mobility, social mobility in the US, inequality, views of 440 00:27:16,880 --> 00:27:19,879 Speaker 1: the government, and it really varies, for instance, when it 441 00:27:19,880 --> 00:27:23,000 Speaker 1: comes to immigration, and that's not just true for the US, 442 00:27:23,119 --> 00:27:25,840 Speaker 1: that's true for um all the countries in the survey, 443 00:27:25,880 --> 00:27:30,480 Speaker 1: which includes many European countries. On immigration, people seem to 444 00:27:30,520 --> 00:27:35,200 Speaker 1: be very sensitive mostly to narratives, to stories about immigrants, 445 00:27:35,240 --> 00:27:39,000 Speaker 1: but facts about the actual number of immigrants, how well 446 00:27:39,119 --> 00:27:42,760 Speaker 1: educated they are, where they come from, how much they 447 00:27:42,760 --> 00:27:46,959 Speaker 1: contribute to the economy. That barely shifts anyone's minds. And 448 00:27:47,040 --> 00:27:50,120 Speaker 1: so it really varies, and it depends on the issue 449 00:27:50,160 --> 00:27:53,120 Speaker 1: under consideration. But I have to say one thing, which 450 00:27:53,160 --> 00:27:56,680 Speaker 1: is that as economists, I think we have a very 451 00:27:56,760 --> 00:28:03,040 Speaker 1: big duty to actually remain incredibly neutral and scientific. You know, 452 00:28:03,119 --> 00:28:06,119 Speaker 1: economics is a science. It's a difficult one because we 453 00:28:06,200 --> 00:28:10,439 Speaker 1: deal with complex systems like the economy and people, and 454 00:28:10,480 --> 00:28:13,080 Speaker 1: so it's it's a difficult science, but it is a 455 00:28:13,080 --> 00:28:16,440 Speaker 1: science using models, using data, and I think it's our 456 00:28:16,960 --> 00:28:21,399 Speaker 1: really our duty to remain very nonpartisan, very neutral, and 457 00:28:21,440 --> 00:28:24,960 Speaker 1: to do our best to actually inform people about what 458 00:28:25,119 --> 00:28:27,960 Speaker 1: we find, what we discover on the workings of the economy, 459 00:28:28,600 --> 00:28:32,359 Speaker 1: and hopefully that will also grant people some trust and 460 00:28:32,400 --> 00:28:35,840 Speaker 1: confidence that you know, we're we're simply trying to convey 461 00:28:35,880 --> 00:28:39,120 Speaker 1: the knowledge that we have, not to influence them in 462 00:28:39,120 --> 00:28:55,880 Speaker 1: one direction or the other. I have a slightly weird question, 463 00:28:56,280 --> 00:28:59,800 Speaker 1: but you know, a lot of the concepts we're talking about, well, 464 00:29:00,000 --> 00:29:03,560 Speaker 1: we're talking about how people perceive fairness, but a lot 465 00:29:03,600 --> 00:29:08,040 Speaker 1: of it also seems to touch on collectivism versus individualism. 466 00:29:08,080 --> 00:29:11,640 Speaker 1: So what's best for all of society or the economy 467 00:29:11,800 --> 00:29:16,280 Speaker 1: versus what's best for me? Specifically, how much of your 468 00:29:16,360 --> 00:29:21,640 Speaker 1: research could be applied, UM, for instance, to the policy 469 00:29:21,720 --> 00:29:25,680 Speaker 1: response to coronavirus in the US and how people are 470 00:29:26,880 --> 00:29:32,760 Speaker 1: reacting to that. So the response to the coronavirus is 471 00:29:32,800 --> 00:29:36,520 Speaker 1: obviously a very topical and pressing issue right now. UM. 472 00:29:36,560 --> 00:29:39,640 Speaker 1: We did a very large scale survey in fifteen countries, 473 00:29:39,960 --> 00:29:44,480 Speaker 1: So we have more than respondents across fifteen countries, among 474 00:29:44,520 --> 00:29:47,800 Speaker 1: which the US, and it's been running since since March 475 00:29:48,200 --> 00:29:51,880 Speaker 1: UM and so we've been able to follow people's views 476 00:29:52,040 --> 00:29:55,560 Speaker 1: on the restrictions put in place and how much they're 477 00:29:55,560 --> 00:29:59,400 Speaker 1: willing to tolerate, how they trade off health risk, whether 478 00:29:59,400 --> 00:30:02,480 Speaker 1: it's their own health risk or the public health risk 479 00:30:02,920 --> 00:30:07,880 Speaker 1: against their civil liberties UM, and civil liberties means you know, 480 00:30:07,960 --> 00:30:11,560 Speaker 1: the right to move around the right for free expression, 481 00:30:12,000 --> 00:30:16,960 Speaker 1: freedom of the press, democracy being respected, et cetera. And 482 00:30:17,000 --> 00:30:21,360 Speaker 1: what we can see is that this trade off fundamentally 483 00:30:21,400 --> 00:30:25,800 Speaker 1: differs in in in across countries. Uh So, actually, a 484 00:30:25,800 --> 00:30:31,320 Speaker 1: country like the US relative to some European countries like 485 00:30:31,360 --> 00:30:35,240 Speaker 1: Spain or Italy, is much less willing to trade off 486 00:30:35,440 --> 00:30:40,640 Speaker 1: their civil liberties uh for health benefits. Actually the country 487 00:30:40,680 --> 00:30:43,920 Speaker 1: that's most willing to trade off those liberties is China. 488 00:30:44,040 --> 00:30:45,520 Speaker 1: And then at the other end of the spectrum, we 489 00:30:45,560 --> 00:30:48,280 Speaker 1: have US and Japan, which are the least willing to 490 00:30:48,280 --> 00:30:51,760 Speaker 1: give up their rights. France and Germany trail very closely 491 00:30:52,040 --> 00:30:55,520 Speaker 1: behind the US, so they're also reluctant to give up 492 00:30:55,560 --> 00:30:58,479 Speaker 1: civil liberties for health. And then countries that were hit 493 00:30:58,560 --> 00:31:01,720 Speaker 1: perhaps very dress stically early on and had a real 494 00:31:02,200 --> 00:31:05,840 Speaker 1: traumatic experience, like Italy, are much more willing to give 495 00:31:05,880 --> 00:31:10,680 Speaker 1: up servi liberties. But this varies within country across people. 496 00:31:11,120 --> 00:31:13,840 Speaker 1: So people who are themselves at a higher health risk 497 00:31:14,440 --> 00:31:17,440 Speaker 1: um and you can predict health risk based on the 498 00:31:17,480 --> 00:31:20,800 Speaker 1: medical models, so their inputs are you know, age, pre 499 00:31:20,840 --> 00:31:24,440 Speaker 1: existing conditions. So people who are at higher health risk 500 00:31:24,520 --> 00:31:29,040 Speaker 1: themselves are much more willing to have restrictions imposed and 501 00:31:29,200 --> 00:31:32,479 Speaker 1: give up their own liberties and accept restrictions for all 502 00:31:32,480 --> 00:31:36,520 Speaker 1: of society, you know, for the public health benefit. So 503 00:31:36,560 --> 00:31:39,800 Speaker 1: that's true within country. And the other thing that's uh 504 00:31:39,840 --> 00:31:42,320 Speaker 1: that's true is that these things are changing over time. 505 00:31:42,880 --> 00:31:46,040 Speaker 1: So as we're able to track people, the willingness to 506 00:31:46,080 --> 00:31:50,560 Speaker 1: give up rights mirrors the worries about health. And so 507 00:31:50,840 --> 00:31:54,760 Speaker 1: as the worries about health have declined um over the 508 00:31:54,840 --> 00:31:58,080 Speaker 1: summer and actually are now only ticking up again, we 509 00:31:58,120 --> 00:32:01,160 Speaker 1: see exactly the same pattern or your willingness to accept 510 00:32:01,160 --> 00:32:04,240 Speaker 1: restrictions or to give up rights. The willingness to give 511 00:32:04,320 --> 00:32:08,080 Speaker 1: up rights declined, you know, or the whole summer, and 512 00:32:08,120 --> 00:32:11,200 Speaker 1: then now it's ticking up slightly again in different places 513 00:32:11,240 --> 00:32:14,640 Speaker 1: as we see second or even third waves appearing. And 514 00:32:14,680 --> 00:32:17,560 Speaker 1: so I think what this implies is that, you know, 515 00:32:17,680 --> 00:32:20,760 Speaker 1: first of all, it's very important to have safeguards in place, 516 00:32:21,160 --> 00:32:24,600 Speaker 1: because clearly, if people are willing to give up their rights, 517 00:32:24,720 --> 00:32:27,760 Speaker 1: it's only temporary. And so it's important in democracies that 518 00:32:27,840 --> 00:32:31,120 Speaker 1: this is you know, ensured to be temporary. And this 519 00:32:31,240 --> 00:32:35,080 Speaker 1: can actually then encourage people to accept restrictions in the 520 00:32:35,080 --> 00:32:39,080 Speaker 1: short run because they know they will be temporary. Another thing, 521 00:32:39,120 --> 00:32:43,040 Speaker 1: again related to the understanding part is in that project too, 522 00:32:43,080 --> 00:32:46,120 Speaker 1: we actually explain to people, you want the benefits of 523 00:32:46,200 --> 00:32:49,400 Speaker 1: various restrictive measures. Uh, you know, what's the benefit of 524 00:32:49,440 --> 00:32:54,400 Speaker 1: having partial or full lockdowns, of imposing some restrictions, what's 525 00:32:54,400 --> 00:32:56,880 Speaker 1: the gain in terms of flattening the curve or we're 526 00:32:56,960 --> 00:33:01,040 Speaker 1: using cases. And once people actually see these nations, they 527 00:33:01,080 --> 00:33:05,520 Speaker 1: become much more willing to comply with those restrictions. And 528 00:33:05,560 --> 00:33:09,040 Speaker 1: so I think the second big lesson is that it's 529 00:33:09,040 --> 00:33:13,000 Speaker 1: important for policymakers to explain to people why something is 530 00:33:13,000 --> 00:33:16,200 Speaker 1: being done, to explain the reasoning behind it, and to 531 00:33:16,240 --> 00:33:19,240 Speaker 1: give people, you know, the tools to understand why something 532 00:33:19,320 --> 00:33:23,800 Speaker 1: is happening or not. So especially as our medical understanding 533 00:33:23,880 --> 00:33:27,240 Speaker 1: is progressing about how this virus looks like and what 534 00:33:27,440 --> 00:33:30,240 Speaker 1: is beneficial, what is not. Obviously we didn't know everything 535 00:33:30,600 --> 00:33:33,080 Speaker 1: at all back in March. We're still figuring so many 536 00:33:33,080 --> 00:33:36,719 Speaker 1: things out. It's very important to inform the public and 537 00:33:36,760 --> 00:33:40,080 Speaker 1: be very you know, neutral and rigorous about how that's done. 538 00:33:40,800 --> 00:33:43,800 Speaker 1: Do you feel as though the salience of tax is 539 00:33:43,840 --> 00:33:46,880 Speaker 1: diminished as a political hot button issue When I hear 540 00:33:46,920 --> 00:33:48,720 Speaker 1: a politician say I'm going to come out and cut 541 00:33:48,760 --> 00:33:51,880 Speaker 1: taxes there's something kind of retro about it, to be like, 542 00:33:51,920 --> 00:33:53,920 Speaker 1: it makes me think of like political fights in the 543 00:33:53,920 --> 00:33:57,000 Speaker 1: eighties and nineties or when I was growing up. And 544 00:33:57,040 --> 00:34:01,000 Speaker 1: I'm just curious if in your research that's the case, 545 00:34:01,440 --> 00:34:04,080 Speaker 1: Um that maybe it's like in terms of people's main 546 00:34:04,120 --> 00:34:07,640 Speaker 1: things they think about the case that it's diminished, and 547 00:34:07,680 --> 00:34:12,200 Speaker 1: b does that create openings for more flexibility for tax 548 00:34:12,280 --> 00:34:15,400 Speaker 1: policy changes if it isn't the number one thing on 549 00:34:15,440 --> 00:34:19,920 Speaker 1: people's mind, So our taxes diminishing an importance in people's minds. Well, 550 00:34:20,120 --> 00:34:22,440 Speaker 1: the first thing to say is that taxes are actually 551 00:34:23,560 --> 00:34:27,720 Speaker 1: all the time they're and they're an incredibly powerful tool 552 00:34:28,480 --> 00:34:32,200 Speaker 1: because they affect basically all stages of the economy, and 553 00:34:32,360 --> 00:34:35,759 Speaker 1: if we get taxes wrong, it can have very damaging effects. 554 00:34:35,840 --> 00:34:37,520 Speaker 1: On the other hand, you know, a well designed tax 555 00:34:37,520 --> 00:34:42,080 Speaker 1: system can both raise revenues redistributed income trying client to 556 00:34:42,120 --> 00:34:47,520 Speaker 1: do so, and at the same time not hurt productivity, competitivity, etcetera. 557 00:34:48,080 --> 00:34:53,040 Speaker 1: So taxes will always be, you know, a gigantic public 558 00:34:53,080 --> 00:34:56,280 Speaker 1: policy issue. How much people focus on them depends obviously 559 00:34:56,320 --> 00:34:58,799 Speaker 1: on what else is going is going on. But the 560 00:34:58,880 --> 00:35:02,520 Speaker 1: current COVID nineteen crisis actually really highlighted some fault lines 561 00:35:02,680 --> 00:35:06,440 Speaker 1: in the economy between people you know, who are able 562 00:35:06,480 --> 00:35:09,640 Speaker 1: to weather such a crisis as well and people who 563 00:35:09,640 --> 00:35:12,480 Speaker 1: are really left behind from it. In addition, it cost 564 00:35:12,760 --> 00:35:16,239 Speaker 1: you know, governments throughout the world gigantic terms of money, 565 00:35:16,440 --> 00:35:19,600 Speaker 1: and so very quickly the issue of how to make 566 00:35:19,680 --> 00:35:21,800 Speaker 1: up for that fiscal deficit, how to make up for 567 00:35:21,840 --> 00:35:25,400 Speaker 1: the shortfall in revenues, will come to the table and 568 00:35:25,480 --> 00:35:28,640 Speaker 1: we will have to take a very hard look at 569 00:35:28,719 --> 00:35:32,239 Speaker 1: how to change the tax system, how to design it better, 570 00:35:32,719 --> 00:35:35,080 Speaker 1: and what to do ultimately to get this revenue. So 571 00:35:35,120 --> 00:35:39,160 Speaker 1: I think, perhaps sadly, it will become a very pressing issue, 572 00:35:39,560 --> 00:35:43,920 Speaker 1: um in the not too distant future. Stephanie, thanks for 573 00:35:44,000 --> 00:35:47,000 Speaker 1: coming on a really interesting approach to a lot of 574 00:35:47,000 --> 00:35:50,360 Speaker 1: these topics. And uh yeah, I just recommend that people 575 00:35:50,360 --> 00:35:53,160 Speaker 1: who are listening to this actually go and check out 576 00:35:53,320 --> 00:35:57,200 Speaker 1: some of your research, including the paper on tax understanding 577 00:35:57,239 --> 00:36:00,839 Speaker 1: tax policy, having people reason. Thank you some much. Thank you, 578 00:36:01,440 --> 00:36:26,160 Speaker 1: Thanks Tracy and Joe, bye bye. So Joe. I enjoyed 579 00:36:26,160 --> 00:36:30,240 Speaker 1: that conversation, even though, UM, I guess not many people 580 00:36:30,480 --> 00:36:33,800 Speaker 1: like talking about taxes, but I do think Stephanie's approach 581 00:36:34,040 --> 00:36:38,239 Speaker 1: to examining the topic is really interesting, and I kind 582 00:36:38,239 --> 00:36:43,080 Speaker 1: of wonder what other policy insights you could get from 583 00:36:43,120 --> 00:36:47,879 Speaker 1: these big surveys. Yeah. You know, something that she said 584 00:36:47,920 --> 00:36:50,919 Speaker 1: that really struggle with me was her point about how 585 00:36:51,480 --> 00:36:55,200 Speaker 1: a lot of people with different viewpoints actually share some 586 00:36:55,320 --> 00:36:59,960 Speaker 1: common assumptions and even common reasoning, and then the flip 587 00:37:00,160 --> 00:37:03,239 Speaker 1: actually happens with a partisan association. So it's like, yeah, 588 00:37:03,480 --> 00:37:05,800 Speaker 1: I think it's wrong that some some children get a 589 00:37:05,880 --> 00:37:09,319 Speaker 1: huge leg up from inheritance or whatever it is, And 590 00:37:09,440 --> 00:37:11,120 Speaker 1: there may be a lot of agreement on that, but 591 00:37:11,840 --> 00:37:13,759 Speaker 1: ultimately in the end, it's like the sort of like 592 00:37:13,760 --> 00:37:18,920 Speaker 1: political affiliation of the estate tax ends up trumping um, 593 00:37:19,239 --> 00:37:22,239 Speaker 1: one sort of prior intuitions that you would uh that 594 00:37:22,440 --> 00:37:27,399 Speaker 1: people that you would theoretically use to arrive at a conclusion. Right. 595 00:37:27,520 --> 00:37:31,120 Speaker 1: It sort of reminds me of like math homework, where 596 00:37:31,239 --> 00:37:34,520 Speaker 1: everyone is working out the problem in a similar way 597 00:37:34,560 --> 00:37:38,839 Speaker 1: but coming to very different answers. They would actually be like, 598 00:37:38,960 --> 00:37:41,439 Speaker 1: you know, it's an interesting question though, like whether that's 599 00:37:41,560 --> 00:37:45,080 Speaker 1: changed over time, um, whether you know, it's like someone 600 00:37:45,120 --> 00:37:48,799 Speaker 1: who identifies as a Democrat, regardless of their reasoning, ends 601 00:37:48,880 --> 00:37:51,880 Speaker 1: up ends up supporting the Democrat policy. Someone who identifies 602 00:37:51,880 --> 00:37:55,680 Speaker 1: the Republican regardless of their personal atuitions, end up ends 603 00:37:55,760 --> 00:38:00,000 Speaker 1: up supporting the policy that's the official plank of Republicans. 604 00:38:00,239 --> 00:38:02,759 Speaker 1: I mean, it seems like because people are just the 605 00:38:02,880 --> 00:38:07,840 Speaker 1: level of partisanship is extremely high these days. Yeah, but 606 00:38:08,000 --> 00:38:10,160 Speaker 1: I think that's going to be like now that we 607 00:38:10,239 --> 00:38:13,239 Speaker 1: have some of these surveys going on, I think it's 608 00:38:13,239 --> 00:38:16,360 Speaker 1: going to be really interesting to see this data evolve 609 00:38:16,520 --> 00:38:19,120 Speaker 1: over the next ten or twenty years. Right, we have 610 00:38:19,239 --> 00:38:21,640 Speaker 1: it now, um, and you can sort of trace how 611 00:38:21,680 --> 00:38:26,880 Speaker 1: attitudes are shifting in whether or not polarization is actually increasing. Yeah, 612 00:38:26,960 --> 00:38:30,160 Speaker 1: and you know, look, I think, Um, obviously, I'm kind 613 00:38:30,160 --> 00:38:32,799 Speaker 1: of skeptical. I mean, again, by the time people are 614 00:38:32,800 --> 00:38:36,040 Speaker 1: listening to this, we'll probably know who the next president 615 00:38:36,120 --> 00:38:38,880 Speaker 1: it is. But man, it's tough to rate. It seems 616 00:38:38,920 --> 00:38:42,120 Speaker 1: politically tough to raise taxes period in any in any 617 00:38:42,320 --> 00:38:47,160 Speaker 1: in any environment, doesn't it. Yeah, I think you'd have 618 00:38:47,239 --> 00:38:51,720 Speaker 1: to calibrate. Well, I don't know, the world may change, 619 00:38:51,760 --> 00:38:54,520 Speaker 1: but you may have an answer to that question very 620 00:38:54,600 --> 00:38:58,000 Speaker 1: very soon. I think less than we'll find out less 621 00:38:58,000 --> 00:39:02,359 Speaker 1: than a week now. Yeah, Okay, well we'll see. I'm 622 00:39:02,400 --> 00:39:05,240 Speaker 1: really worried when this episode comes out that that everything 623 00:39:05,239 --> 00:39:07,879 Speaker 1: we've just spoken about will be irrelevant and all our 624 00:39:07,880 --> 00:39:10,040 Speaker 1: work will be for not But um, well we'll just 625 00:39:10,080 --> 00:39:16,080 Speaker 1: apply to the election. Okay, how much to rerun everything? Okay? Um. 626 00:39:16,080 --> 00:39:18,120 Speaker 1: To those of you who are listening, thank you very 627 00:39:18,200 --> 00:39:20,880 Speaker 1: much and this has been another episode of the All 628 00:39:20,920 --> 00:39:23,879 Speaker 1: Thoughts Podcast. I'm Tracy Alloway. You can follow me on 629 00:39:23,880 --> 00:39:27,040 Speaker 1: Twitter at Tracy Alloway, and I'm Joe wisn't thought you 630 00:39:27,040 --> 00:39:29,719 Speaker 1: could follow me on Twitter at the Stalwart. And you 631 00:39:29,719 --> 00:39:33,160 Speaker 1: should follow our guest on Twitter, Stephanie Stancheva, She's at 632 00:39:33,680 --> 00:39:38,440 Speaker 1: s Stancheva. Follow our producer Laura Carlton, She's at Laura M. Carlton. 633 00:39:38,719 --> 00:39:42,520 Speaker 1: Follow the Bloomberg head of podcast, Brancesca Levi at Princesca Today, 634 00:39:42,719 --> 00:39:45,360 Speaker 1: and check out all of our podcasts under the handle 635 00:39:45,760 --> 00:39:48,880 Speaker 1: at podcasts. And if you enjoyed this episode or any others, 636 00:39:49,000 --> 00:39:51,840 Speaker 1: we'd appreciate it if you went to Apple Podcasts and 637 00:39:51,880 --> 00:39:53,960 Speaker 1: gave us a five star review so that more people 638 00:39:54,239 --> 00:40:25,439 Speaker 1: discovered Odd Lots. Thanks for listening.