The voices of Tax Policy Center's researchers and staff
The other day, a Daily Deduction reader asked why I used the phrase “tax relief” as a synonym for “tax cuts.” He suggested that “relief” is a loaded term that implies taxes are too high and therefore bad, and that tax cuts, in turn, are good. That hadn’t occurred to me. When I think of relief, I think of “a remission of tax normally due.”
Does “relief” influence perception? My immediate test: I asked my soon-to-be fourth- and sixth-graders. “What does ‘relief’ mean to you?” My son answered, “Phew!” I prodded further: “And what about ‘tax relief?’” My daughter explained, “That’s when you’re so glad you don’t have to pay something anymore.” Indeed.
The question takes on a particular importance on the heels of the two party conventions—whose entire purpose is to influence voters. When it comes to taxes, how much can they be swayed by perception?
Start with this: Americans kind of like paying taxes. Vanessa Williamson of the Brookings Institution finds that most of us see the act as one of patriotism and a source of pride. Given that, are we especially vulnerable to a framer’s influence?
“Tax relief” is a pretty common frame used by politicians in both parties. Republican presidential nominee Donald Trump promises tax relief for middle class Americans. Democratic presidential nominee Hillary Clinton says on her website that she’ll “provide tax relief to working families.”
But who’s to say whether tax relief is too generous or a tax burden is too heavy? Taxpayers, that’s who. Could a single word change their willingness to pay?
A 2009 study by Stian Reimers of University College London shows that it may take more than a word, but that taxpayers can be very sensitive to framing.
Reimers was testing people’s views about progressivity in the tax system. It turned out that their responses were highly sensitive to the way he asked the questions. For example, they were more supportive of progressivity when a tax was described in percentages rather than amounts. When the unit of tax was in amounts people were more supportive of progressivity when they saw a tax calculated as a reduction in after-tax income rather than the amount of tax paid.
Why? Reimers thinks it may be because the idea of “taxes paid” refers to your contribution to society, and thinking of “after-tax income” draws your focus to how taxes affect your standard of living.
Maybe framing is more effective when it gives people a chance tap their own experience, rather than ponder an abstract idea.
Then again—there are feelings to consider, and they may be easier to tap. A University of Southern California study found that people approach a tax policy decision with their own feelings, or ideals, in mind. But “in a complex area such as tax, independently attractive ideals are often in conflict, and the result is shifting, inconsistent preferences.”
Those inconsistent preferences, the study concludes, are easy to manipulate. Taxpayers’ knowledge of an issue can counteract any unfair influence, but “the costs of learning are high, and the benefits of knowledge — given the miniscule input the average citizen has on policy formation — tiny… What incentive do politicians of either party have for explaining the complexities and conflicts involved?”
Unfortunately, not much. Look at how relatively quickly public opinion of the estate tax soured. In 2001, an estimated 50,500 estates owed $23.7 billion for the “tax on your right to transfer property at your death.” (That is 2 percent of the 2.4 million people who passed away that year.) That same year, Congress voted to phase out the tax in the Economic Growth and Tax Relief Reconciliation Act. Why? Michael Graetz and Ian Shapiro argue that a clever lobbying campaign aimed at people’s emotions trumped the facts. In 2004, pollster Frank Luntz offered one explanation for how opponents did it.
“Look, for years, political people and lawyers—who, by the way, are the worst communicators—used the phrase ‘estate tax.’ The public wouldn't support [its repeal] because the word ‘estate’ sounds wealthy. Someone like me comes around and realizes that it's not an estate tax, it's a death tax, because you're taxed at death. And suddenly something that isn't viable achieves the support of 75 percent of the American people. It's the same tax, but nobody really knows what an estate is. But they certainly know what it means to be taxed when you die.”
Others, including Graetz and Shapiro, argue it took more than a simple word change. But whether it’s with one word or more, framing can have an impact. Where does that leave the average taxpayer in an election season riddled with efforts to sway our beliefs?
Think about it this way: Tax policy is complicated and confusing. Are you able to form a strong opinion on a policy quickly? Good for you… but before you get too comfortable, it might be a good idea to see if you’re being framed.
The Tax Hound, publishing the first Wednesday of every month, helps make sense of tax policy for those outside the tax world and connects tax issues to everyday concerns. Need help or have an idea? Post a comment.
Posts and Comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
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The teleprompter is tested as preparations are made for the Republican National Convention, Friday, July 15, 2016, at the Quicken Loans Arena in Cleveland. (AP Photo/Alex Brandon)