WEBVTT - This Is How People Really Feel About Paying Taxes 0:00:11.080 --> 0:00:14.720 Hello, and welcome to another episode of the All Thoughts Podcast. 0:00:14.800 --> 0:00:19.280 I'm Tracy Hallaway and I'm Joe. Wasn't thal Joe? Uh? 0:00:19.640 --> 0:00:22.400 Let's see. I know we keep putting caveats on all 0:00:22.400 --> 0:00:26.120 our episodes recently, but we are recording this with less 0:00:26.120 --> 0:00:29.520 than a week to go before the presidential election in 0:00:29.560 --> 0:00:33.240 the US. Yeah, just just five days to go. Yeah, 0:00:33.440 --> 0:00:35.320 so the whole world could be different by the time 0:00:35.360 --> 0:00:38.760 people are listening to this. This whole episode could just 0:00:38.800 --> 0:00:41.600 be like this weird time capsule from some normal time 0:00:41.840 --> 0:00:44.120 or I guess not really normal these days, but from 0:00:44.159 --> 0:00:48.599 some totally different time. So hello from the past. So 0:00:48.720 --> 0:00:51.520 on that note, you know, everyone in DC is getting 0:00:51.560 --> 0:00:55.160 ready for the election, and at the same time, you 0:00:55.200 --> 0:00:58.760 can just imagine there are rooms filled with people, um, 0:00:58.800 --> 0:01:01.640 you know, with policy waks who are trying to figure 0:01:01.680 --> 0:01:05.560 out what policy might look like under both you know, 0:01:05.600 --> 0:01:09.400 another four years of Trump and also potentially four years 0:01:09.440 --> 0:01:12.360 of Biden. Yeah. So I think, like, you know, the 0:01:12.440 --> 0:01:15.240 first order of business most people assume, if there's say 0:01:15.280 --> 0:01:19.800 a Biden administration, would be some sort of major spending stimulus, 0:01:19.800 --> 0:01:22.479 sort of heavy running up the deficit in order to 0:01:22.520 --> 0:01:26.960 get the economy back to trend or accelerate the return 0:01:27.040 --> 0:01:30.600 to full employment. Then you know, that's the kind of 0:01:30.680 --> 0:01:33.920 thing that people imagine could get past in February. But 0:01:34.120 --> 0:01:36.920 if you know, we're talking about a Biden administration or 0:01:36.920 --> 0:01:39.720 any Democratic administration in the future, then there would also 0:01:39.760 --> 0:01:42.960 be further policy questions beyond that, and one of those, 0:01:43.000 --> 0:01:45.759 of course would be, uh, the future of the tax system, 0:01:45.760 --> 0:01:49.720 which was reformed in the first Trump administration. Yeah, I mean, 0:01:49.960 --> 0:01:53.080 taxes have been a big talking point, you know, ever 0:01:53.120 --> 0:01:56.480 since Trump came in in six and did a lot 0:01:56.520 --> 0:01:59.720 of stuff, including reducing the corporate tax rate. But the 0:02:00.040 --> 0:02:03.240 Biden tax program is also getting a lot of attention 0:02:03.280 --> 0:02:06.000 at the moment because he's talking about doing a tax 0:02:06.440 --> 0:02:11.200 hike for very wealthy individuals and also I think talking 0:02:11.240 --> 0:02:15.079 a little bit about maybe um upping or imposing tax 0:02:15.200 --> 0:02:19.480 on capital gains. So clearly this is all in focus. Uh, 0:02:19.760 --> 0:02:23.000 death and taxes are inevitable. Um the fact that all 0:02:23.040 --> 0:02:26.000 lots would do an episode on taxes, I suppose, is 0:02:26.040 --> 0:02:30.160 also inevitable. But I think one really interesting thing when 0:02:30.160 --> 0:02:33.080 it comes to tax policy is, you know, there is 0:02:33.120 --> 0:02:37.960 this idea among economists and among policy makers that they're 0:02:38.080 --> 0:02:41.280 trying to balance a number of things here, you know, 0:02:41.480 --> 0:02:45.600 they're trying to balance I guess you would say the 0:02:45.680 --> 0:02:51.160 efficiency cost of taxes um with their benefits, so, you know, 0:02:51.280 --> 0:02:56.800 making society more equal, bringing revenue for the government obviously, 0:02:57.480 --> 0:02:59.200 and there's a tendency to look at that in a 0:02:59.240 --> 0:03:03.080 really rational way. But as hopefully a lot of people 0:03:03.240 --> 0:03:06.919 know already, the average person on the street might have 0:03:06.960 --> 0:03:11.400 different ideas about the drawbacks or the benefits of taxes 0:03:11.639 --> 0:03:15.320 um depending on their personal position. Right, They're not necessarily 0:03:15.320 --> 0:03:19.200 thinking about it rationally. No, people don't necessarily think about 0:03:19.240 --> 0:03:22.880 taxes rationally other than most people don't like paying them, 0:03:23.080 --> 0:03:27.280 and most people, all else equal, would like to pay less. 0:03:27.919 --> 0:03:29.680 But I do think, you know, it's interesting, and we'll 0:03:29.720 --> 0:03:33.839 get into this in the conversation. I have a I 0:03:33.880 --> 0:03:36.960 feel like the salience of taxes as a political issue 0:03:37.000 --> 0:03:38.640 has gone down, that there are a lot of people 0:03:38.800 --> 0:03:42.040 for whom cutting taxes. You know, it's this huge mantra 0:03:42.120 --> 0:03:44.760 for years. Is probably one of the defining elements of 0:03:45.040 --> 0:03:47.720 the GOP in the US is that they're the party 0:03:47.720 --> 0:03:50.200 of tax cuts. And of course Trump did cut taxes, 0:03:50.600 --> 0:03:52.800 but it feels like, you know, everything else going on 0:03:52.960 --> 0:03:55.760 these days we have so many cultural fights and COVID 0:03:55.880 --> 0:03:59.280 and other question the salience of the tax number, which 0:03:59.280 --> 0:04:01.560 has already been a lot, feels like it has a 0:04:01.640 --> 0:04:04.480 less political residence. But we'll discuss that with our guests. 0:04:04.520 --> 0:04:07.040 Maybe that's just my bias. I don't know, who knows 0:04:07.040 --> 0:04:10.800 if that's actually true. No, I think you're right. It 0:04:10.880 --> 0:04:13.080 just feels like there are like, you know, like tax 0:04:13.160 --> 0:04:15.480 cut Republicans. It used to just be such a thing, 0:04:15.480 --> 0:04:18.680 and it feels like that people have sort of moved on. 0:04:18.720 --> 0:04:23.280 But who knows the good old days when the only 0:04:23.320 --> 0:04:27.000 thing people were really getting worried about was higher taxes. Yeah, 0:04:27.040 --> 0:04:31.720 easier times, a simpler time. All right. Well, uh, that 0:04:31.839 --> 0:04:35.320 brings us um quite nicely to our guest for this episode, 0:04:35.600 --> 0:04:39.560 I suppose. So we have Stephanie Sancheva. She's a professor 0:04:39.640 --> 0:04:43.600 of economics over at Harvard. She's done a lot of 0:04:43.640 --> 0:04:48.640 really interesting research on all types of policy, but specifically, 0:04:48.640 --> 0:04:53.040 she did a very good paper about taxes. Recently. She also, 0:04:53.320 --> 0:04:58.320 I think, just won the Elaine Bennett Research Prize, very 0:04:58.400 --> 0:05:01.760 prestigious award in economics, and I think she's also been 0:05:01.800 --> 0:05:05.599 tipped as a future Nobel Prize winner. Hopefully we're not 0:05:05.720 --> 0:05:08.920 chinxing it by saying that. But Stephanie, thank you so 0:05:08.920 --> 0:05:12.160 how much for coming on. Thank you. It's my pleasure 0:05:12.200 --> 0:05:15.600 to be here. So I guess just to begin with. 0:05:15.880 --> 0:05:19.160 You know, you published this paper, I think it was 0:05:19.200 --> 0:05:23.640 back in August, and it was called Understanding Tax Policy 0:05:23.839 --> 0:05:27.680 How do People Reason? And the really interesting thing about 0:05:27.720 --> 0:05:31.440 this was you went out and you did a really 0:05:31.920 --> 0:05:37.800 massive and detailed survey about how people individually feel about taxes. 0:05:38.200 --> 0:05:41.279 Why did you decide to take that approach? Yeah, So 0:05:41.320 --> 0:05:44.760 when I decided to do this project, it came from 0:05:44.800 --> 0:05:48.640 having experience with other such types of research where I've 0:05:48.680 --> 0:05:52.160 been trying to understand how we as citizens think about 0:05:52.279 --> 0:05:55.840 our public policies, the economy and society. You know, how 0:05:55.880 --> 0:05:58.839 we reason, what we perceive as fair, what shapes our views. 0:05:59.360 --> 0:06:02.120 I think this is very important both our researchers and 0:06:02.120 --> 0:06:05.880 then for policymakers to understand in order to design policies 0:06:05.920 --> 0:06:08.800 that are better in line with our views of society. 0:06:08.920 --> 0:06:11.360 And I found it for this the Social Economics Lab 0:06:11.360 --> 0:06:15.120 at Harvard, where we do these large scale social economic 0:06:15.200 --> 0:06:18.640 surveys um sometimes on several countries to try and see 0:06:18.920 --> 0:06:23.200 how people reason, um, how people understand things, and you know, 0:06:23.240 --> 0:06:25.599 the key idea is, basically, we need to listen more 0:06:25.680 --> 0:06:29.960 to people. Um. And so this project on tax policy 0:06:30.160 --> 0:06:32.039 came from the idea that you hear a lot of 0:06:32.040 --> 0:06:35.440 things in the policy debate. Some of them economists would 0:06:36.000 --> 0:06:39.200 say are accurate, others you may say are quite misleading. 0:06:39.680 --> 0:06:41.919 And so I was very curious, what are sort of 0:06:41.960 --> 0:06:45.400 the mental maps, the mental models people use when they 0:06:45.400 --> 0:06:48.800 decide what tax policy to support, what tax policy to 0:06:48.880 --> 0:06:53.440 vote for. So do people ever like higher tex So 0:06:53.920 --> 0:06:58.320 there's a lot of complex considerations that go into thinking 0:06:58.320 --> 0:07:01.880 about taxes for people. UM. What I find is actually 0:07:01.880 --> 0:07:05.279 that the key factor in people's minds is how fair 0:07:05.440 --> 0:07:09.240 is the tax system? Um. People care first and foremost 0:07:09.360 --> 0:07:13.320 about fairness. And what's interesting is that, of course fairness 0:07:13.360 --> 0:07:15.960 is in the eye of the beholder. So do people 0:07:16.000 --> 0:07:19.160 like high taxes? Yes, for some people who believe that 0:07:19.200 --> 0:07:22.240 it's actually unfair to have a lot of income inequality 0:07:22.520 --> 0:07:26.160 or a lot of wealth inequality. For those people, higher 0:07:26.200 --> 0:07:29.920 taxes would actually be considered fair. And so perhaps the 0:07:30.400 --> 0:07:33.400 you know, the complexity here is that fairness truly is 0:07:33.480 --> 0:07:36.000 in the eye of the beholder and means very different things. 0:07:36.000 --> 0:07:40.200 To different people. So one of the interesting things about 0:07:40.240 --> 0:07:44.320 your paper is that you also, um, do this research 0:07:44.440 --> 0:07:47.840 and you sort of talk to people along partisan lines. 0:07:47.960 --> 0:07:53.080 So I'm curious, does the idea of fairness change substantially 0:07:53.120 --> 0:07:58.200 depending on whether you're Republican or Democrat. So our ideas 0:07:58.200 --> 0:08:02.720 about taxes actually look very divided along political lines, and 0:08:02.760 --> 0:08:05.360 not just in the final policy views. If you want 0:08:05.400 --> 0:08:08.480 whether we want higher lower taxes, um, that we we 0:08:08.560 --> 0:08:11.320 already knew and we can easily see. But actually, at 0:08:11.400 --> 0:08:14.920 every step of the reasoning about taxes, uh, they're big 0:08:14.960 --> 0:08:19.720 political divides. So what are the considerations if you want 0:08:19.880 --> 0:08:21.960 that people that people have in mind? And how are 0:08:21.960 --> 0:08:25.160 they divided along partisan lines? Well, the first thing people 0:08:25.680 --> 0:08:28.440 care about is what will be the economic effects of 0:08:28.520 --> 0:08:32.000 raising taxes or lowering taxes. The second thing they care 0:08:32.040 --> 0:08:35.640 about is who will benefit, who will gain, who will lose? 0:08:36.240 --> 0:08:39.439 And then the fanness concerns I would summarize us, how 0:08:39.480 --> 0:08:42.720 do we wait the gains and losses? Um, how much 0:08:43.320 --> 0:08:45.480 weight do we put on the losers? How much weight 0:08:45.480 --> 0:08:48.160 do we put on the winners? Here, people also care 0:08:48.160 --> 0:08:51.520 about their views of the government, Um, how the government 0:08:51.520 --> 0:08:54.760 will spend that revenue is the government efficient, does the 0:08:54.800 --> 0:08:58.679 government have a lot of waste um? And then finally, 0:08:58.720 --> 0:09:01.960 people also care out what they already know on the 0:09:02.000 --> 0:09:05.400 current tax system. And so at each of these steps 0:09:05.440 --> 0:09:08.640 there's actually big political divides. So to make this simple, 0:09:09.400 --> 0:09:12.520 if you're more on the left, on the Democrats side, 0:09:12.960 --> 0:09:16.400 then you actually think taxes have lower economic costs, so 0:09:16.480 --> 0:09:19.800 higher taxes don't hurt the economy as much. You also 0:09:19.840 --> 0:09:23.440 think that in general, tax cuts you know at the 0:09:23.720 --> 0:09:27.560 at the top will really mainly benefit higher income people, 0:09:27.960 --> 0:09:29.880 as opposed to if you're on the right, where you 0:09:29.920 --> 0:09:33.480 believe in trickle down, namely that tax cuts on high 0:09:33.480 --> 0:09:36.400 incomes will benefit everyone else as well, it would be 0:09:36.440 --> 0:09:39.920 the tide that lifts all boats. Um. If you're on 0:09:39.960 --> 0:09:41.720 the left, you also tend to think that it's much 0:09:41.720 --> 0:09:45.800 more unfair to have so much income inequality or wealth inequality, 0:09:46.040 --> 0:09:50.439 and you believe fundamentally people are not entitled to infinitely 0:09:50.520 --> 0:09:53.000 high incomes and that it's fair to tax away at 0:09:53.040 --> 0:09:57.679 least part of it. What's perhaps most striking is that 0:09:58.120 --> 0:10:02.760 there is artisan divide even on the perception of reality. 0:10:02.880 --> 0:10:06.720 That's what I call polarization of reality, which is even 0:10:06.760 --> 0:10:09.720 about the current tax system how high is the top 0:10:09.720 --> 0:10:12.240 tax rate, where does the top tax bracket start, how 0:10:12.320 --> 0:10:15.560 high is these stay tax et cetera. Even there there's 0:10:15.600 --> 0:10:20.559 actually uh divergence along political lines. So in a nutshell, 0:10:20.960 --> 0:10:23.520 people who are on the left tend to think taxes 0:10:23.679 --> 0:10:28.160 are lower, less progressive, there's more incoming equality than people 0:10:28.200 --> 0:10:31.280 on the right do. And what is striking is that 0:10:31.320 --> 0:10:34.240 these are things that one can actually look up. Um, 0:10:34.280 --> 0:10:36.160 this is not a matter of opinion. This is a 0:10:36.160 --> 0:10:41.240 matter of current factual realities. So I'm I want to 0:10:41.240 --> 0:10:44.200 talk a little bit more. You know, I'm curious obviously 0:10:44.200 --> 0:10:45.880 about what you found, but I want to talk a 0:10:45.920 --> 0:10:50.240 little bit more about your methodology and your approach and 0:10:50.280 --> 0:10:53.280 why you think the survey going out and asking people 0:10:53.960 --> 0:10:57.040 is a good idea, Because I'm curious if, like, you know, 0:10:57.240 --> 0:10:59.800 someone came to me and said, like, oh, what are 0:10:59.840 --> 0:11:02.280 your use on the tax system or why do you 0:11:02.320 --> 0:11:05.240 support higher lower taxes? You know, I might come up 0:11:05.240 --> 0:11:08.960 with some thoughtful thing about fairness because I'm talking to 0:11:09.040 --> 0:11:11.920 someone and I want to sound reasonable and I want 0:11:11.920 --> 0:11:14.440 to say, oh, well, it's very important for me to 0:11:14.559 --> 0:11:16.760 know that it's being spent well, and I want to 0:11:16.800 --> 0:11:21.000 say smart sounding sophisticated things. But then then then they leave, 0:11:21.200 --> 0:11:23.680 and then I'm thinking and just want lower taxes because 0:11:23.720 --> 0:11:26.440 I want to keep more money. So I'm curious about 0:11:26.480 --> 0:11:29.760 what you see is the advantages, the costs, and benefit 0:11:30.240 --> 0:11:33.839 of the survey method for getting people's opinions on what 0:11:33.880 --> 0:11:38.240 you just described are very political questions. This is a 0:11:38.280 --> 0:11:41.160 great question, And let me give a bit of background 0:11:41.160 --> 0:11:44.280 to this methodology, so you know, the key idea is 0:11:44.280 --> 0:11:48.320 really that it's important to get into people's minds, into 0:11:48.360 --> 0:11:52.040 our minds of citizens, and there are things which we 0:11:52.120 --> 0:11:55.360 cannot see in other data and that we cannot extract 0:11:55.440 --> 0:11:59.680 with other methods. And these are these invisible things like perceptions, 0:12:00.040 --> 0:12:04.360 these attitudes, reasoning, and so we as economists have many 0:12:04.400 --> 0:12:08.319 tools based on large scale data sets, but these invisible 0:12:08.360 --> 0:12:11.880 things will still not be seen in these other data sets. 0:12:11.920 --> 0:12:17.400 So in some sense, directly asking people is perhaps the 0:12:17.440 --> 0:12:20.200 best way to go here. What's important is, of course, 0:12:20.400 --> 0:12:23.000 that these surveys are not just you know, opinion polls 0:12:23.040 --> 0:12:27.480 on the street, but actually carefully designed, rigorous research tools. 0:12:27.520 --> 0:12:32.559 So they're done online in a way that's very interactive, intuitive, 0:12:32.960 --> 0:12:37.400 walking people through a controlled order series of questions. Uh 0:12:37.400 --> 0:12:40.480 and they're done in a completely anonymous way, so there's 0:12:40.480 --> 0:12:43.640 absolutely no social pressure. Um. You can take it on 0:12:43.679 --> 0:12:46.080 your phone, you can take it alone in front of 0:12:46.080 --> 0:12:48.760 your browser. There is no surveyor in front of you, 0:12:49.200 --> 0:12:53.920 so there's actually very little mispers, very little incentive to misreport. 0:12:54.520 --> 0:12:57.080 Let me just resay that sentence. There's actually very little 0:12:57.320 --> 0:13:01.640 incentive to misreport um your opinions, as there is absolutely 0:13:01.640 --> 0:13:05.319 no social pressure around it. Now, the design is very critical, 0:13:05.880 --> 0:13:10.080 so I go through several blocks here too get a 0:13:10.120 --> 0:13:12.600 sense of really what's going on in people's minds. And 0:13:12.640 --> 0:13:15.600 I actually start with what you suggested, which is a 0:13:15.720 --> 0:13:19.400 plane open ended question to get actually people's gut reaction, 0:13:19.600 --> 0:13:22.800 which is, what are your main considerations about taxes? And 0:13:22.800 --> 0:13:25.040 then I can analyze these answers, you know, in a 0:13:25.080 --> 0:13:28.920 freely open ended way, and it's very clear what sort 0:13:28.920 --> 0:13:33.400 of considerations come out. Everybody mentions fairness, people mentioned the 0:13:33.400 --> 0:13:37.040 middle class a lot, People worry about loopholes. But then 0:13:37.080 --> 0:13:40.440 I can drill down by walking people through more detailed questions, 0:13:40.760 --> 0:13:44.160 so on the mechanisms of taxes. For instance, if taxes 0:13:44.200 --> 0:13:48.360 increased on higher incomes, what would you think the effects 0:13:48.360 --> 0:13:52.000 would be? Do you think higher incomes with less entrepreneurial 0:13:52.320 --> 0:13:57.400 save less move states, um, workless great less jobs, et cetera. 0:13:57.880 --> 0:13:59.959 And so you can want people through all these detail 0:14:00.160 --> 0:14:03.800 reasonings and elicit much more detailed you know, beyond the 0:14:03.840 --> 0:14:10.680 gut reaction responses, and so taken together, this relatively long 0:14:10.800 --> 0:14:14.120 and well designed survey actually really shed some good light 0:14:14.160 --> 0:14:31.240 into what's going on in people's heads. One of the 0:14:31.320 --> 0:14:34.840 things that you did, UM in the survey was you also, 0:14:35.440 --> 0:14:38.960 I think you showed people short videos that kind of 0:14:39.040 --> 0:14:44.040 explain how tax policy actually works. Could you maybe talk 0:14:44.280 --> 0:14:49.720 a little bit about that aspect of UM of the research. Yes. 0:14:49.920 --> 0:14:53.080 So my idea here was to see whether if we 0:14:53.160 --> 0:14:59.080 actually showed people simple explanatory videos, which are fully neutral, 0:14:59.320 --> 0:15:02.560 non part is and pedagogical, the way you may see 0:15:02.600 --> 0:15:07.040 in a plain introductory economics course, whether that could actually 0:15:07.040 --> 0:15:11.920 help improve understanding of taxes. And I designed these videos 0:15:11.960 --> 0:15:16.680 to be UM, short and fun hopefully easy to understand, 0:15:17.280 --> 0:15:21.880 and I simply vary the frame UM with which with 0:15:21.920 --> 0:15:25.040 which I show them. So, for instance, one video will 0:15:25.080 --> 0:15:29.840 focus mainly on the distributional consequences of taxes, essentially who 0:15:29.880 --> 0:15:32.480 gains who loses, you know, to the best of our 0:15:32.760 --> 0:15:36.480 economics knowledge today. The other will focus only on the 0:15:36.520 --> 0:15:40.240 economic costs of benefits, So what would be the effects 0:15:40.280 --> 0:15:43.640 on the economy, um, will output be lower? Will there 0:15:43.680 --> 0:15:47.120 be economic costs? And then the third one actually brings 0:15:47.160 --> 0:15:50.360 these two together, and very much like economists would think, 0:15:50.720 --> 0:15:53.120 points out that there's always a trade off between the 0:15:53.160 --> 0:15:56.240 costs and benefit of taxes. The benefits in terms of 0:15:56.600 --> 0:16:01.000 raising revenues possibly re distributing income, you know, as much 0:16:01.000 --> 0:16:05.280 as is in line with your fairness and distributional inclinations. 0:16:05.360 --> 0:16:08.920 And there's the economic costs because taxes always change people's 0:16:08.960 --> 0:16:12.520 behaviors to some extent or company's behaviors, and so entails 0:16:12.520 --> 0:16:15.160 some economic costs, and that the right tax system is 0:16:15.200 --> 0:16:19.320 the one that actually balances these costs and benefits. And 0:16:19.360 --> 0:16:21.920 what I see is that these videos are actually quite effective, 0:16:22.480 --> 0:16:28.280 although they're pretty short, they're actually quite effective in making people, uh, 0:16:28.480 --> 0:16:30.520 you know, more aware of the tax system and also 0:16:30.560 --> 0:16:35.040 more supportive of progressive income taxes and more supportive also 0:16:35.120 --> 0:16:38.560 of the state tax. And I I noticed that the 0:16:38.720 --> 0:16:42.760 arguments that actually people care most about, very much in 0:16:42.800 --> 0:16:45.640 line with what I said earlier, are really the distributional 0:16:45.680 --> 0:16:49.400 impacts and the fairness impact. So when people see the 0:16:49.480 --> 0:16:53.440 distributional impacts of taxes, how it could actually help you know, 0:16:54.000 --> 0:16:57.320 lower income people or the middle class, uh, and actually 0:16:57.320 --> 0:17:01.000 smooth the income distribution a little bit. Even if they 0:17:01.240 --> 0:17:04.440 become more aware of the economic costs as well, on balance, 0:17:04.720 --> 0:17:07.640 they tend to then side more with being in support 0:17:07.640 --> 0:17:12.520 of progressive taxes. So you mentioned estate taxes just then. 0:17:12.720 --> 0:17:15.480 I'm curious, did you find out the way people feel 0:17:15.520 --> 0:17:19.040 about estate taxes is different to the way they feel 0:17:19.080 --> 0:17:22.520 about income taxes or I don't know. I don't think 0:17:22.560 --> 0:17:25.920 your paper went into corporate taxes, but I'm just curious 0:17:26.240 --> 0:17:30.399 what your take is on on variations and how people 0:17:30.440 --> 0:17:35.240 think about different types of taxes. So how do people 0:17:35.280 --> 0:17:38.080 think about different types of taxes? In the paper, I 0:17:38.119 --> 0:17:42.000 look at two major tools on the personal tax side, 0:17:42.000 --> 0:17:46.000 which are um income taxes and the estate tax, which 0:17:46.040 --> 0:17:49.280 is a tax that is paid when someone passes away 0:17:49.320 --> 0:17:52.800 on the estate they pass on UM to their heirs 0:17:52.920 --> 0:17:56.720 and UM. I think that for other types of taxes, 0:17:57.119 --> 0:18:00.879 the the major considerations, which is, you know, what are 0:18:00.920 --> 0:18:03.359 your finn as views will also be probably the most 0:18:03.440 --> 0:18:06.800 important ones. UM in the case of income in the 0:18:06.880 --> 0:18:11.200 state taxes, the biggest difference is that people are actually 0:18:11.720 --> 0:18:15.080 much more unaware of how these state tax works. Uh. 0:18:15.119 --> 0:18:19.040 The state tax is a very unpopular tax in the US. 0:18:19.080 --> 0:18:21.879 It's sometimes called the death tax, which is obviously not 0:18:21.960 --> 0:18:25.879 a not a great name, and it's very disliked. UM. 0:18:26.000 --> 0:18:28.240 What I find is that it's very disliked because people 0:18:28.240 --> 0:18:31.840 believe it's ultimately a double tax, which is a taxes 0:18:31.920 --> 0:18:35.120 income that has already been taxed at some point. Uh. 0:18:35.119 --> 0:18:39.200 And it's also very unpopular because it's very misunderstood. So 0:18:39.320 --> 0:18:43.119 for instance, UM, in general, respondents think that around a 0:18:43.240 --> 0:18:45.800 third of all estates will end up paying these state 0:18:45.840 --> 0:18:49.320 tax and that couldn't be further from the truth. In fact, 0:18:49.760 --> 0:18:52.439 less than one in thousand estates will be subject to 0:18:52.440 --> 0:18:55.200 these state tax So it's actually a tax that gives 0:18:55.240 --> 0:18:58.560 in very high in the wealth distribution that you may 0:18:58.560 --> 0:19:02.000 pass on, and people are unaware of that. UM. So 0:19:02.119 --> 0:19:04.720 they believe, for instance, the chances that they are people 0:19:04.800 --> 0:19:07.080 they know or people like them will end up paying 0:19:07.080 --> 0:19:11.919 it is much higher than it actually is. But even there, 0:19:11.960 --> 0:19:15.760 the major considerations relate to fairness, and the state tax 0:19:15.840 --> 0:19:19.959 is actually a great example to illustrate how complex fans 0:19:20.040 --> 0:19:23.080 views can be and you are, you know, the listeners 0:19:23.119 --> 0:19:26.040 can can think about themselves. How do you feel about 0:19:26.080 --> 0:19:29.920 the fairness of taxing away wealth that's passed on from 0:19:30.000 --> 0:19:34.000 parents to their children. Well, it's actually a very thorny 0:19:34.040 --> 0:19:37.960 ethical issue because if you take the perspective of children, 0:19:38.680 --> 0:19:42.720 then many people across the political spectrum agree that it's 0:19:42.840 --> 0:19:46.000 unfair for children, you know, just by virtue of being 0:19:46.000 --> 0:19:49.720 born in wealthier families to start with better amenities and life, 0:19:49.760 --> 0:19:53.439 start with more advantages in life, and then receive higher inheritances. 0:19:53.600 --> 0:19:56.679 So many people taking the perspective of children would feel 0:19:57.400 --> 0:19:59.639 that this is unfair and that we like equality of 0:19:59.640 --> 0:20:03.959 a poor unity. Um, we like they give everybody equal chances. 0:20:04.080 --> 0:20:06.760 And so if you just think about the children's perspective, 0:20:07.160 --> 0:20:10.840 most people actually agree that it's fair to try to 0:20:10.920 --> 0:20:13.280 level the playing field a little bit by having an 0:20:13.359 --> 0:20:16.520 estate tax. But then flip it around and take the 0:20:16.560 --> 0:20:20.399 perspective of parents. So parents, you know, who have perhaps 0:20:20.400 --> 0:20:24.080 worked hard and saved in order to transmit wealth to 0:20:24.119 --> 0:20:27.600 their children. Once we take that perspective there, people feel 0:20:27.640 --> 0:20:31.359 quite differently. They feel, oh, it's actually perhaps not that 0:20:31.400 --> 0:20:34.320 fair to tax away the wealth of parents who have 0:20:34.480 --> 0:20:37.399 worked so hard to give money to their children. And 0:20:37.440 --> 0:20:40.359 by the way, even if parents have themselves inherited and 0:20:40.680 --> 0:20:43.640 we're you know, already wealthy when they were young, even 0:20:43.680 --> 0:20:46.119 there people think it's not great from the perspective of 0:20:46.119 --> 0:20:48.720 the parents attacks this away. And so this is in 0:20:48.880 --> 0:20:53.680 conflict with each other because these two perspectives are fundamentally 0:20:53.760 --> 0:20:56.720 opposing each other. And so in the end, people have 0:20:56.800 --> 0:21:00.800 to face this ethical dynama. And what I see is 0:21:00.840 --> 0:21:03.800 that on balance, in the end, people who are more 0:21:03.840 --> 0:21:07.280 on the left, on the Democrats side, tend to on 0:21:07.440 --> 0:21:11.720 balance say, okay, I'd rather have less inequality among children. 0:21:11.800 --> 0:21:14.760 I'd rather have more equality of opportunity among children, even 0:21:14.800 --> 0:21:17.320 if that means I need to penalize some parents and 0:21:17.359 --> 0:21:20.160 tax away part of their states. And on the right, 0:21:20.200 --> 0:21:24.320 people tend to side perhaps more with the parents and thinking, well, 0:21:24.359 --> 0:21:28.000 it's too bad there will be unequal opportunities and inequality 0:21:28.040 --> 0:21:31.919 for children. But I still prefer to leave parents, you know, 0:21:32.080 --> 0:21:34.000 the right to pass on their wealth to their children 0:21:34.080 --> 0:21:39.160 tax free. So how much the upshot of your research 0:21:39.840 --> 0:21:44.040 is essentially applicable to the political language that has to 0:21:44.080 --> 0:21:48.639 be used in any campaign or policy debate. So people 0:21:48.720 --> 0:21:52.240 have their views. I want to raise taxes, who want 0:21:52.240 --> 0:21:56.160 to cut taxes? How much does your research essentially sort 0:21:56.200 --> 0:21:59.600 of inform for either side the sort of framing that 0:21:59.720 --> 0:22:05.400 can be used to gather public support. So I want 0:22:05.400 --> 0:22:08.960 to be very clear about my motivations here. UM. My 0:22:09.080 --> 0:22:13.359 goal is to actually try and help people understand the 0:22:13.440 --> 0:22:16.320 workings of taxes better. And for that the first step 0:22:16.400 --> 0:22:20.679 is actually you know the diagnostics state, which is where 0:22:20.720 --> 0:22:25.840 does the disagreement lie, Where is the misunderstanding hidden, what 0:22:26.200 --> 0:22:29.760 is incoherent perhaps in the reasoning or in the chain 0:22:30.000 --> 0:22:33.560 of reasoning. And so this is why I'm doing this project, 0:22:33.600 --> 0:22:37.720 to actually identify how people think about tax policy. The 0:22:37.800 --> 0:22:42.159 goal also by showing, for instance, these instructional videos, is 0:22:42.200 --> 0:22:47.080 to really see whether explanations improving understanding can help people. 0:22:47.720 --> 0:22:52.040 And I have, you know, no wish to um encourage 0:22:52.040 --> 0:22:55.639 people in one direction or the other, especially when it 0:22:55.680 --> 0:22:58.679 comes to fanness considerations, which have very much you know, 0:22:58.760 --> 0:23:03.080 your own individual or our own social you know, prerogative 0:23:03.160 --> 0:23:06.639 to have. But it's actually really about improving understanding. And 0:23:06.680 --> 0:23:10.760 I think that's very important because many people sometimes actually 0:23:10.760 --> 0:23:15.840 from disadvantage groups by not understanding what policies do are 0:23:15.880 --> 0:23:18.240 not able to assess what benefits or costs they will 0:23:18.240 --> 0:23:21.600 have to them, And I think giving people the tools 0:23:21.600 --> 0:23:24.320 to understand that means them being able to stand up 0:23:24.359 --> 0:23:29.040 more for themselves and make better decisions for themselves. And 0:23:29.160 --> 0:23:32.280 you know, perhaps which we're thinking, but I'm also hoping 0:23:32.359 --> 0:23:34.960 that for many of these things, we can approach it 0:23:35.000 --> 0:23:41.600 from a more objective, nonpartisan angle and actually, you know, 0:23:42.359 --> 0:23:48.960 improve understanding rather than foster political differences. So I think 0:23:49.000 --> 0:23:51.159 your survey just on that point, Your survey is a 0:23:51.240 --> 0:23:54.560 sort of snapshot in time. But do you get the 0:23:54.680 --> 0:24:00.800 sense that people's views on taxes have solidified more along 0:24:00.880 --> 0:24:04.840 partisan lines in recent years? Like do you think had 0:24:04.880 --> 0:24:07.720 you've done this survey twenty or thirty years ago, do 0:24:07.760 --> 0:24:11.760 you think it would have shown as stark split between attitudes. 0:24:14.400 --> 0:24:18.200 It's a really hard question to say whether polarization has 0:24:18.240 --> 0:24:21.120 increased or not in the US. It depends on the issues, 0:24:21.720 --> 0:24:26.159 and there isn't you know, so much detailed like the 0:24:26.160 --> 0:24:29.000 way we would do today survey data going back in 0:24:29.080 --> 0:24:32.159 time to be able to say this. However, what is 0:24:32.200 --> 0:24:37.919 clear is that because there's partisan gaps at every single step, 0:24:37.960 --> 0:24:41.359 including on the views of reality, uh, they are clearly 0:24:41.440 --> 0:24:45.800 quite deeply anchored, and so I think it's um. It's 0:24:46.040 --> 0:24:49.119 unsurprising in the end, going through these chains of reasonings 0:24:49.320 --> 0:24:52.439