Americans’ lack of support for raising taxes on the wealthy to address inequality may be explained, in part, by our beliefs in “equal treatment,” finds a new study by political scientists at NYU and Stanford University.

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Americans’ lack of support for raising taxes on the wealthy to address inequality may be explained, in part, by our beliefs in “equal treatment,” finds a new study by political scientists at New York University and Stanford University.

“If many U.S. voters don’t support higher tax rates, it’s not because they are uninformed, distracted, or confused,” explains NYU’s David Stasavage, who co-authored the paper with Stanford’s Kenneth Scheve. “It’s for a more simple reason: they don't think this would be fair.”

The research, “Why U.S. Tax Policy Has Not Responded to Rising Inequality,” was presented at September’s Annual Meeting of the American Political Science Association.

Many have wondered, in an era of increasing inequality, why there hasn’t there been more support for raising taxes. Many progressives have concluded that voters are uninformed or distracted by other issues—or that money in politics allows the rich to buy the policies they want. An alternative, and long-standing view, stretching from Renaissance Florence to today, argues against progressive taxation, positing that just as everyone in a democracy should have the same vote, everyone should also pay the same tax rate.

To address the validity of this latter view—that many people may not want to raise taxes on the rich because they think it would violate a norm of equal treatment in a democracy—the researchers examined U.S. survey data from 2014 and 2016. They also conducted a survey in 2017 that had a unique experimental component. In it, some respondents were randomly assigned to receive a question about the importance of equal voting rights (e.g., “How important is it that the government guarantees equal voting rights?”) while others were asked a “control” question (e.g., “How important is it that the United States government celebrates Thanksgiving?”).

The 2017 results showed that those who received the equal voting rights question were substantially less likely than those in the control group to say that the wealthy should pay higher tax rates than everyone else. In other words, the equality prompt was associated with opposition to progressive taxation—regardless of how respondents answered the equality and control questions.

The authors note that in spite of the link between equal treatment and opposition to progressive taxation, there is support for changing the tax code in ways that would, in effect, raise taxes on the wealthy.

Specifically, many respondents who opposed progressive taxation still said that they care about inequality. Moreover, they indicated that they would also support tax reform that reduces loopholes that currently allow the wealthy to pay lower effective tax rates than everyone else.

“There are competing standards of fairness when it comes to tax policy, and voters who oppose higher taxes on wealthy subscribe to a norm of equal treatment,” observes Stasavage, Julius Silver Professor in NYU’s Wilf Family Department of Politics. “However, those who believe in equal treatment don’t want to see the wealthy pay lower rates than everyone else, as is now often the case.

“For this reason, there would be very substantial support today for tax reform that cuts loopholes used by the wealthy. More generally, those who support doing something about inequality need to consider how policies that address this problem can be framed so as to bring proponents of ‘equal treatment’ on board.”

In their 2016 book, Taxing the Rich: A History of Fiscal Fairness in the United States and Europe (Princeton), Scheve and Stasavage explored related tax matters. In it, they considered evidence from 20 countries covering the past 200 years in offering an in-depth account of progressive taxation. The authors found that governments don’t tax the rich just because inequality is high or rising—rather, they do it when people believe that such taxes compensate for the state unfairly privileging the wealthy.


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