This transcript has been edited for clarity.

David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: paradoxical position.

While conducting surveys for her book Taxation and Resentment: Race, Party, and Class in American Tax Attitudes, Andrea Campbell found that when she asked Americans about their attitudes toward taxation in general, most said that they supported the principle of progressive taxation.

However, when it comes to specific tax policies, most said they favored regressive taxes over progressive taxes. So what explains this tension?

In her book, Campbell argues that the complicated federal tax system creates confusion and resentment, leading to a disconnect between what Americans support in principle and in practice.

Joining me now to talk more about this is Tax Notes historian Joe Thorndike. Joe, welcome back to the podcast.

Joseph J. Thorndike: Hey, thanks for having me.

David D. Stewart: Now, I understand you recently spoke with Andrea. Could you tell us a bit about her?

Joseph J. Thorndike: Yeah. So Andrea Campbell, she is a political scientist at MIT [Massachusetts Institute of Technology], and her real specialty is she explores the relationship between public opinion and public policy.

David D. Stewart: And what did you discuss?

Joseph J. Thorndike: We talked about her new book, Taxation and Resentment, which looks at public opinion on taxes — mostly in a contemporary sense, but also historical to some degree — and tries to figure out what people really feel and think about taxes, and why most people don't really support progressive taxes as much as you might expect.

David D. Stewart: All right. Let's go to that interview.

Joseph J. Thorndike: Andrea, it is so great to have you here today on the podcast.

Andrea Campbell: Well, thank you so much. It is a delight to be with you, Joe.

Joseph J. Thorndike: Yeah. We've been talking about these issues in these books for years now, and it was so exciting to see that you've gotten the book published. I'm really glad we're going to have a chance to talk about it.

Like every great book, yours starts with a paradox. You set it up really nicely in the beginning. In surveys, people say that rich people should pay more. They like progressive taxation. But when you name specific taxes, things that are actually progressive, and you ask them how they feel about that, well, support, then it drops a lot. So what's going on?

Andrea Campbell: Yeah, I call this phenomenon the principle-policy gap. If you look at surveys about who should pay taxes, the majority of Americans say the rich should pay more, and that corporations don't pay enough, the rich don't pay enough. There's a strong abstract connection to the idea of ability to pay and progressive taxation.

But when we ask people about specific taxes — how do you feel about estate tax, the income tax, sales taxes — what we find is that people display much more support for regressive taxes that ultimately cost them much more as a share of income than they do progressive taxes. So there's this big disconnect, this paradox, as you say, between what they believe in theory and then what they believe in practice.

Joseph J. Thorndike: Is this just because of these particular taxes that we're asking them about, like the income tax? It's just uniquely awful or uniquely irritating. Or is this generalizable? Is there something going on here around progressivity, or is it really just these taxes?

Andrea Campbell: Well, I think there's something definitely going around progressivity, and there's a couple of factors behind this.

So one is sheer complexity. Our progressive taxes, especially the income tax, are simply so complex, in part because of all the credits and deductions and preferential rates that litter the tax code, collectively known as the tax expenditure program. So this complexity makes it hard for people to understand their stakes in tax policy. So that's one thing.

The other thing is that the rich, the wealthy, high-income, high-wealth individuals have spent the century plus since the advent of, say, the federal income tax in 1913 trying very hard to get their effective rates of taxation reduced. And they've done this through a few different ways. One is lower rates, lower marginal rates on their incomes, and the other is the system of tax expenditures.

And then the third thing that goes on is just obfuscation by political elites. No one is speaking clearly to the public about how these burdens go across different kinds of income levels. And so it's easy when you have a complex, confusing system, and no one is offering clarifying comment, to be confused yourself about what is going on distributionally.

Joseph J. Thorndike: I feel like that leads me to another term that you introduce in the book that I think is illuminating. You say that the U.S. tax system is self-undermining. Tell us what that means, but that seems like it might be related to what we were just talking about.

Andrea Campbell: Absolutely. So the federal tax system is progressive, imposes higher effective rates on higher-income people. It has become much less progressive over time, in large part because high-wealth, high-income individuals have been really successful over the decades in getting their effective rates reduced. Why is the larger system self-undermining?

Well, one thing is that the wealthy have these preferences. They know their stakes in tax policy. They are highly knowledgeable about how the tax system works. They know how it impacts their ability to acquire more assets and so on. They have the ear of elected officials, in large part because of patterns of lobbying and campaign finance that are much more available to privileged groups than ordinary people. And so you've got this sort of group of people who are railing against the tax system repeatedly over time.

Then you've got ordinary members of the public. And if you look at the self-interest of ordinary people, they should be on board with progressive taxation. We already know that they prefer progressive taxation in the abstract. And then if you look at the costs and benefits they get out of the tax system, progressive taxes impact high-income people more than ordinary people.

And so if you're a political economist, the classic models all say ordinary people should want progressive tax rates to be high because it doesn't impact them. It impacts the rich. What happens is because of the complexity, the obfuscation, ordinary people end up having these attitudes that go against both their abstract preference for greater progressivity and their self-interest, their material stakes, how these tax rates would affect them. And so it's self-undermining because ordinary people's tax attitudes are upside down. They end up having, in many ways, the same attitudes as the rich, which makes no sense. And so those are some of the factors why the tax system is self-undermining.

Joseph J. Thorndike: I want to explore this a little bit more here. So is it so crazy for them to think this? Because I think the assumption here is like, this is crazy. They're not pursuing their self-interest. And that seems certainly true, undeniably true.

But what if — and I'm trying to think if your book makes this argument, or if this is really my argument that I'm imposing on it — but what if what they see is that all this complexity, all of these favors inserted in the tax system, what if this strikes them as grossly unfair because they know that rich people are the ones benefiting from most of these benefits, that many of them are only available to people with high-priced lawyers to advise them, and are structured such that they can't be used. They just involve different kinds of income that regular people don't have.

What if they look at all that and they say, "Wow, this thing is just fraudulent. It's just riddled with this favoritism. I hate it. I just hate it. You tell me that it's progressive. I tell you it's a tool for favoritism." So are these people so crazy? I mean, maybe they've accurately assessed the income tax.

Andrea Campbell: Well, what's interesting is that I have a couple of different ways of asking people their attitudes about the income tax, and you get the same responses, whether you're talking about people's own income tax or the income tax system overall.

And so they're not differentiating between those two. It's not that they just look at this and think, "This is a terrible system; therefore, I don't like it." It's really that the rich are not paying enough.

Joseph J. Thorndike: OK. I can buy that. And I think, actually, my argument does sort of depend on people being a little more engaged in policy than they actually are, outraged by an idea of how the tax should work, and that's probably unrealistic.

You make the point here, as we've just been talking about, that self-interest doesn't really seem to drive the tax opinions of regular people a lot of the time. So why is it that the wealthy seem to not have that problem?

Andrea Campbell: Yeah. Well, I think there's a couple things that advantage the rich when it comes to tax policy. People have studied the rich. What do they think about tax? What are their tax attitudes? What do they know about the tax system?

And it turns out they are incredibly knowledgeable. And so the kind of fog of tax, as [Edward McCaffery] puts it, that confuses ordinary people is much less of a problem for the very wealthy. They understand the system at every level, federal, state, local. They understand what their stakes are. They realize how this tax expenditure system works. They are unburdened by this kind of lack of knowledge or confusion.

The other thing is that we haven't talked yet about partisanship and party ID, and how, say, Democrats versus Republicans feel about taxes. But that is also another factor that differentiates high-income people from ordinary people.

So think about a modest-income Republican. When they think about taxes, because they have lower incomes, if they had attitudes congruent with their self-interest, that would drive them towards embrace of progressive taxes, dislike of regressive taxes. But because they're Republicans, they get this additional signal, which is, "No, progressive taxes are bad. Those are what we want to cut" — because that has been the party's platform for many, many years. And so for these low-income Republicans, they're getting two different signals that are contradictory.

For the rich, there are fewer such contradictions. This is based on work that Larry Bartels and Jason Seawright did where they interviewed some high-income, high-wealth individuals. Most of these individuals turn out to be Republicans. And even when they're Democrats, they are relatively conservative on economic matters, even though they might be liberal on social matters, which is why they identify as Democrats.

So high-income, rich people, first of all, are not confused about how the tax system works, and don't have these conflicting signals about what their preferences should be. Everything kind of lines up in the same direction for them. And so the cognitive load is less for them than it is for ordinary taxpayers.

Joseph J. Thorndike: So you mentioned just a second ago, tax expenditures. And I'd like to get into that a little bit more because they're kind of a big part of the book. But basically, most popular discourse in the media, online, wherever else, when it comes to taxes, wants to talk about tax rates usually. Sometimes they'll talk about what we're taxing, an estate versus income versus property or sales. But mostly they like to talk about rates because, honestly, most tax conversations end up being about the income tax at some point.

But you want to talk more about tax expenditures, provisions like the mortgage interest deduction or the tax advantage treatment of health benefits for employees. Why are tax expenditures so important to how people feel about taxes?

Andrea Campbell: Yeah, great question. Well, there's a couple of reasons. So one is, as we've been saying, they are a major source of the confusion that people have about taxes, and that people don't understand the difference between marginal rates and effective or average rates, the difference being the impact of the tax expenditure system.

The other thing that makes tax expenditures so important in people's tax attitudes, and something I wanted to explore, was political scientists have studied attitudes about direct spending for a long time. And we know that many Americans, many white Americans especially, are skeptical about especially social spending, social programs, especially if they believe they are going disproportionately to Black and Latino people and so on. And I was curious whether attitudes towards indirect spending, which is what tax expenditures are, look the same or different than about direct spending.

It turns out it doesn't matter how the government spends its money, whether it's directly overtly or through this arcane covert system of tax expenditures — the structure of attitudes is very similar among ordinary people, which is to say those, especially white Americans, who harbor more resentment towards non-whites have more negative attitudes towards tax expenditures that they perceive as going towards those groups.

So if we look at social policies where we have direct spending, some social programs are kind of race-neutral or even white-coded, like Social Security. Few white Americans have a beef with Social Security because it's an earned benefit, it's universal, all those kinds of things. Among white Americans, those who are more racially resentful really dislike spending on welfare, housing assistance, food assistance, Medicaid, programs that they perceive as going disproportionately to Black and Latino people. When we look at tax expenditures, we see the same pattern.

So some tax expenditures do benefit the middle class: the tax break on employer-provided health insurance and retirement plans. There, we see that among white Americans, racial attitudes have no effect on how people feel about those tax breaks, and people are in fact pretty supportive of those tax breaks.

But the tax breaks that are perceived as going toward lower-income people, like the EITC [earned income tax credit] especially, but also the child tax credit, attitudes look like attitudes towards welfare and food stamps, which is to say those whites who are more racially resentful want those tax breaks reduced. And so we've got this analogous pattern where if benefits go to the middle class, no problem. If they go to lower-income people, read Black and Latino people, that's a problem.

The other interesting thing about white Americans, especially the racially resentful, is that they are relatively supportive of tax policies that actually help the rich. So they actually embrace the deduction for charitable contributions, which disproportionately goes to very-high-income people. And they also embrace the preferential low rate on capital gains.

And so you get this structure that is analogous across direct spending, indirect spending, the tax attitudes themselves where the racially resentful prefer policies that help high-income, high-wealth households, and wish to see reduced the spending or tax benefits that go to lower-income people, especially those perceived as going more to Black and Latino people.

Joseph J. Thorndike: So this is kind of interesting, and tell me if I'm getting this wrong: White Americans have a little bit of a grasp on their self-interest here. When they can identify something that they think is benefiting a group they don't like because they're racially resentful, and they're not wrong about it sometimes, like the EITC, then they don't like it because it's going to someone else. "I'm a taxpayer, and these people are leeching off me, blah, blah, blah." So they've got a decent sense of that.

Now they don't when it comes to things like the capital gains preference, because although they can have a stake in that, if we include home sales in that, then lots of people do have a stake in it, but the vast majority of that benefit is going to really rich people. So they kind of lose a touch with their self-interest. Have I got that right?

Andrea Campbell: Yeah, yeah. But it also goes to the argument that progressive taxation doesn't have as much support as we might anticipate among the public. Because where ordinary people are falling short in terms of connecting their self-interest to their attitudes is on these tax policies that are disproportionately about how much are we taxing high-income, high-wealth households. So that's where they fall down.

And there's a couple of possible reasons for that. One thing that we know is that people don't know a lot about the tax system. They tend to extrapolate from their own experience to the experience of high-income, high-wealth households about whom they have very little direct knowledge.

So for example, people think that the estate tax, for example, is very unfair because it constitutes double taxation. And they think about their own situation. They think about, "OK, what wealth do we have?" The wealth that we have as ordinary taxpayers is we've earned some income, and we've managed to save some of that income, and we've invested it in something — a house, maybe you've got some stocks or something. But anyway, your wealth is kind of what you've built from your unspent income. And so if it is already taxed as income, if it gets taxed again in some way, like the property tax or the estate tax, that strikes people as double taxation.

What they don't realize is that for high-wealth households, oftentimes those assets that are held aren't going to be taxed at all, unless they are taxed by the estate tax, because they're unrealized capital gains and those kinds of things. And so another thing that's going on is that, for sort of ranges of attitudes, people are kind of exercising their self-interest to some extent, but there's whole other ranges that end up being highly consequential, especially when we're talking about a progressive tax system, where they can't make the calculations.

Joseph J. Thorndike: That's pretty convincing to me. And what really comes across is that for a lot of people, nonrich people, there's a moral economics, which is distinct from the science of economics that we know.

And even as you say it, and you're describing this attitudes toward the estate tax, and I kind of tried to put myself in the shoes of one of these people. And I mean, I can see the impulse here: "I worked hard to save this money. This was so hard for me to save it, and that makes it valuable. And the proceeds from that, they belong to me already. And if my house increases in value, well, I deserve that because I worked so hard to save this." It's really divorced from economic concepts of income or wealth or anything else.

And this is where I keep coming back to Steve Sheffrin's book. His thing on a lot of these tax issues is that they are bound up with noneconomic concepts that are really powerful. And I think maybe your argument about race falls into this category as well. But that when it comes to the estate tax, he says, "Actually, the reason people hate the estate tax is because of death." It's because death is very powerful. That's why it's been called the "death tax" by opponents because it taps into something, sort of a gut-level feeling about death, and that's painful. And the last thing we should do is tax people when it's in their moment of pain.

Again, that's where the self-interest — the economic in the real meaning of the term, the classical meaning of the term — the economic self-interest gets obscured by these other moral commitments. Which let's just say maybe they're completely legitimate and we should be paying attention to them, but they're not economic in the traditional sense of that.

So I don't know. Your argument about race to me seems to fall into that, which is that, as a historian, I kind of want to say, let's not give the economists the keys to the kingdom and say their logics are the only logics that work all the time, but their logics are worth counterposing to these moral logics.

Andrea Campbell: Yeah, there's definitely a lot of moral thinking about taxes, who pays, who benefits, what is just, as Steve Sheffrin says. And when lots of ordinary people look at the tax system, they think, in fact, as you said, "I worked hard to earn this income and acquire this asset."

And a couple things. One is, "Other people seem to work less hard, and may be getting benefits from the government that I am paying for with my sweat, and how fair is that?" But there's definitely a big moral component of that.

Of course, in the United States, that gets refracted through race because there's a long, long history of, in part, politicians for their own personal electoral gain making connections, drawing connections between who pays, who benefits, and race.

And this goes back to the nation's founding. It becomes more pronounced when the role of government gets larger and tax dollars are used to start providing benefits. In the 19th century, it's for public education. When we get to the 20th century, as you well know, the development of the welfare state. And there's a sense of "Are white taxpayers being disproportionately called on to fund these programs that go in turn disproportionately to non-whites, and how fair is that?" So there is that moralizing.

To go back to this notion of people extrapolating from their experience to the experience of the rich, I think another thing that happens is many people, when you're thinking about death, would love to leave something for their children. Another kind of moral commitment, that value of family. And so the thought that the government is going to take away some of that is horrifying.

And even for people who realize that they are not personally going to pay the estate tax, they don't even like it even for the wealthy. Because they think, well, the wealthy earned that money and want to pass it on to their children as well, so it's not just.

The other thing I will say about extrapolation is estate taxes are taxes on wealth. And we know that different kinds of resources can be taxed. Income can be taxed. Wealth can be taxed. Consumption can be taxed. And people feel differently about those different categories.

With wealth, again, I think people are extrapolating from the form of wealth that is most common for ordinary taxpayers, which is to say the home. People really dislike property taxes. People think, "Why am I paying rent on something I own?" As one of my respondents said, "I am being penalized for putting aside this income, acquiring this asset." Again, back to the sort of double taxation argument. And I think ordinary people are extrapolating from "this is what's happening with my form of wealth. I can see why those with another form of wealth, this large estate, would also perceive taxation of that to be unfair."

Joseph J. Thorndike: This seems incredibly important to me, these sorts of insights here. Because it's tempting for people who spend their lives in a world of tax to just say, "There's something wrong here. These people just don't see it. They just don't understand. They're getting it wrong."

But to understand the other moral commitments — some of them unappealing moral commitments, moral commitments we may not approve of like racial resentment, racism — but to understand them is really important. Because otherwise we're going to sit here and try to talk people into believing in progressivity, and be like, "No, because you're going to pay less and the rich people are going to pay more, and you don't approve of the way" — I mean, I remember this from Larry Bartels's articles from a long time ago too: "You say you don't approve of the way wealth is distributed. And yet when we ask you about redistributing wealth, you're like, 'Oh no.'"

And as I remember it, he says, that's because they believe it's a problem. They don't think government can fix it. They're not convinced that government is the solution. But I think understanding even the ugly elements of these opinions is so important, even if you're a fan of progressive taxation. That you cannot economically argue people into agreeing with you necessarily when you're up against things like racism or fear of death or commitment to family, or all these other pieces which make sense to other people, even if they don't make sense to economists.

Andrea Campbell: Oh yeah. And these feelings are deep-seated, right? What's more deep-seated than family and so on? And so yes, economists can argue up and down about why, economically, it makes more sense to have this set of beliefs versus that set of beliefs. But yes, you're running into a brick wall.

Joseph J. Thorndike: I think that's one of the frustrations that supporters of progressive taxation, or progressives in modern politics language, that they bump up against all the time is that they can't really understand why they're losing people. And I mean, maybe they would be like, "Oh, OK, well, they're all racist," which is true. As your book points out, there are other factors, too, which aren't really about race. But I think understanding that is really important if you love progressive taxes and you want to save them that, again, I'd already said this, but you can't just economically argue people into agreeing with this. That's not going to work.

All right. Well, let's put up, again, we've now talked a lot about this already. But let's just put the race element of your argument right up front because it really seems to me that this is the key discovery in your book is that self-interest doesn't really predict how people are going to feel about taxes, but for white Americans, racial resentment does. So could you just lay that out a little bit more directly for us?

Andrea Campbell: Oh, absolutely. There are a couple different ways to measure how white people feel about, especially, Black people. And one of those is this concept of racial resentment. We think that some white Americans harbor animus towards, especially, Black Americans.

And one dilemma for surveyors is, well, how are you going to actually measure those sentiments? Because people in polite society know they shouldn't say really overt things like, "Black people are less intelligent than white people and so on." That's what we call old-fashioned racism.

And so [Donald] Kinder, who's an analyst, a political scientist at University of Michigan, with a number of colleagues, developed these measures of racial resentment where because survey respondents were self-censoring and not giving accurate answers to these old-fashioned racism measures, they came up with new measures that try to measure racism in a different way, which is perceptions that Black Americans are violating certain deeply held American values like hard work, for example, or individualism.

And so they've come up with this sort of scale that measures resentment in this way because they found that white Americans who harbor animus are more likely to kind of fess up, as it were, according to these kinds of measures because then you don't appear to be racist. It's that these people are violating these deeply held values, American values. So that's one way that I measure racism.

And what I find is that attitudes towards taxes vary significantly along levels of racial resentment. That those white Americans who are more likely to say that nonwhite Americans violate these values are less supportive of a number of taxes, especially the progressive taxes. And that alone is interesting because that is yet another factor that really helps high-income, high-wealth people in their long campaign to get progressive taxation blunted is that you've got this set of people who are not thinking about taxes in terms of economic issues, but rather thinking about it in terms of race.

Now, one thing that I also did was that there's some controversy about whether this is the only way to measure racism. And so on a few surveys, I am able to use kind of old-fashioned racism measures, and find that those two tax attitudes also are related to those old-fashioned measures as well. So basically, any way that you measure racism, you get this finding that those who harbor more animus are more negative towards a variety of taxes, especially the progressive taxes.

Joseph J. Thorndike: So you've told us a lot about what white Americans think about taxes and how race plays into that. What do you find about Black Americans when you talk to them about taxes?

Andrea Campbell: Yeah, this is really something I was committed to doing in the book because most books about tax attitudes and Americans really focus on white Americans. And there's a historian, Andrew Kahrl, who's done just stunning work about the property tax and other aspects of taxation, has pointed out that Black and Latino Americans have only been analyzed as the subject of whites' ire and never as taxpayers in their own right, which of course they are.

There's also this whole literature among fiscal sociologists and legal scholars that political scientists have kind of ignored that discusses the fact that many aspects of tax policy have disparate impacts on, especially, Black Americans. So much of how our tax system has been created over the years, either inadvertently or intentionally, ends up overtaxing Black Americans compared to similar whites.

Some of these are quite overt. The kinds of things that Andrew Kahrl talks about with regard to the property tax, that Black Americans have obviously been steered historically into certain neighborhoods, when they even could buy a home. Then they get overtaxed by tax assessors, even though they get worse services. Then when they go to sell their homes, they realize less of a gain because those neighborhoods are not as good, don't have as many amenities. As Andrew Kahrl says, they get the short end of both sticks. That is well known.

But as Dorothy Brown and other legal scholars have pointed out, there's other ways in which the tax system overtaxes Black households. So just to give a couple of examples, the tax expenditure system is a big culprit here. One major reason that Black households at the same income level pay more in taxes than white households is that Black households on average have less access to employer-provided benefits like health insurance and retirement plans, which reduce your taxes because those health premiums and those retirement contributions are not taxed.

There's other things. Dorothy Brown points out that there can be marriage bonuses, that married couples pay less in taxes than single people at the same income. Those marriage bonuses are most likely when one earner earns much more than the other earner and much less likely when the two earners are more even. And the latter is more common among Black households, whereas having one earner that earns way more than the other is more common among white households.

So all of these tax policies, whether advertent or inadvertent, end up taxing Black Americans more. So when I go to look at Black public opinion, on average, Black Americans are more liberal, support a greater role for government than white Americans, but when you look at their tax attitudes, they are more likely to say various taxes are unfair and that they should be decreased. And their tax attitudes actually resemble those of white Republicans much more than they resemble those of white Democrats, even though most of the Black people in my surveys are in fact Democrats. This is just, I think, completely fascinating.

And I should say a couple things. One is I'm not trying to argue that Black Americans have a sort of self-interested stance that white Americans don't. I think it's more that taxes are a very coercive function of government, and Black Americans have been on the bad end of the stick when it comes to many other government functions. If you think about the welfare state, the carceral state, both so punitive, right?

Joseph J. Thorndike: And around taxes, as you say. Like around Andrew Kahrl's story and the property tax. That's a very coercive, oppressive use of a tax instrument.

Andrea Campbell: Oh, absolutely. Absolutely. And he probably talked about this. There's other things too. This is not just stuff that happened in the '40s, '50s, '60s. This is stuff that's happening now. A lot of cities that are falling short on revenues are doing these tax auctions where they're foreclosing on people who are behind on their property taxes. And those kinds of tax auctions disproportionately affect Black homeowners. So it's not in the past; it's in the present.

And so basically, you have this group of Americans who are otherwise more positively disposed towards government, government activity, who, when it comes to the tax system, have more negative tax attitudes, which is quite something. So basically, everybody has their own reason to not like taxes. The sources might be different, but it's like everybody.

Joseph J. Thorndike: And you say that in the book, that the spectrum of public opinion here is lopsided. Because, as you say, lots of people have a reason to be suspicious of taxes, of progressive taxes. And so if you're a rich person who wants to get rid of the estate tax, you're going to find a relatively large number of people ready to agree with you about it for a whole host of reasons. But I think that lopsided thing is very illuminating about the trajectory [tax policy has] been on since say the 1970s.

Andrea Campbell: And we haven't talked much today about partisanship and so on, but it's also lopsided there. Because it is the case that Republicans are more likely to say various taxes are unfair than Democrats, but the partisan differences are not as great as you might anticipate. And it's because there's a pretty significant reservoir of antitax attitudes among Democrats, and especially among political independents. They look even more antitax than Republicans.

And so think about, as a political strategy for the Republican Party, ever since the "Reagan Revolution," there's been an embrace of lower taxes, tax cuts as being a kind of cure for everything that ails. And there's a real electoral payoff to that kind of agenda because you earn support from Republicans, of course. You earn support from a fair number of Democrats, and then you earn support from a lot of independents. And so it's really a politically propitious set of stances to have.

Joseph J. Thorndike: This really resonates for me. This makes intuitive sense for me, because I love Vanessa Williamson and her new book. I think it's outstanding. I really love it.

But Vanessa and I, I think, have always disagreed some on sort of these gut-level feelings about tax, which I feel are much less pro-tax than she might think they are. In the research she's done, she finds people are proud to pay taxes, but my gut is that taxes are inherently coercive, and they separate people from their hard-earned property and they don't like them.

And I actually think that part of it is the unpleasantness of a tax that is actually how we come together on it. So you're not going to come together, and they're like, "Hey, let's all pay our taxes because we love government. This will pay for government." I think it's more like, "Hey, let's all pay our taxes because we do want our roads paved. And it sucks to pay these taxes. So let's all do it together. Let's just sacrifice." I think the element of sacrifice is key because it's unpleasant. So it's shared sacrifice, not shared building of democracy.

Andrea Campbell: But the problem is that it's not always shared. So I think that Vanessa is right that many people are proud to pay taxes. And if you look at surveys, what does it mean to be an American? People say, "Well, paying your taxes."

The problem is other people. The problem is other people not paying their fair share. And it gets back to Steve Sheffrin's kind of moral argument. The problem is other people are cheating the system. So think about, I think that's one of the reasons that people really hate the property tax, because they look at their neighbor who went down to city hall and got some kind of adjustment to their property taxes. Like, "Wait a second, what's that about?" Or these periodic reports that you might get of like, "Oh, these really rich individuals didn't pay any tax at all." Well, that's unfair. It's always about what's going on with those other people.

Joseph J. Thorndike: I've been telling people that I want to write a book called Other People's Taxes. My essential argument is that people don't hate paying taxes. They hate other people not paying taxes. And that that is the driving — to me, that is the single truth of taxes in America from the founding to today. Almost every tax argument, it ultimately ends up being framed as "These people are getting away with murder." And that that's what really gets people even more than "I hate paying taxes."

Andrea Campbell: Exactly, exactly. I have this puzzling finding that people are so upset about these progressive taxes, and they're relatively sanguine — it's all relative — about regressive taxes like sales taxes. So the sales tax is among the least disliked taxes. So why would that be?

So one is we never total it up over the year, so people have no idea how much goes to government in sales tax. But I think another reason, and this comes up in the open-ended responses of some of my respondents about what tax is most fair, least fair, and why. People who like the sales tax is because they feel like you can't slip out of it.

And lots of respondents say, "Look, whatever your income is, you've got to pay the sales tax. You can't get out of it like you can get out of your income taxes if you've got fancy tax lawyers." And that it gets at this notion of like, well, what are other people paying? Are they getting away with stuff or not? And the sales tax seems like pretty airtight, right?

Joseph J. Thorndike: I don't think it's crazy. Honestly, that just doesn't — I mean, again, I think it's important for all of us to remember that progressivity is not the only measure of fairness or goodness in a tax. And that we kind of want it to be for all sorts of reasons, the maldistribution of wealth, and the way it's getting worse over time. There are lots of reasons why we want progressive taxes.

But we need to remember that other things matter to people too. And if people think, I said this in the beginning, but if people are thinking the income tax is kind of unfair and it's full of favoritism, well, they're not wrong. And they get lots of reinforcement with that. "Oh, Bill Gates pays a lower average rate than you and I do," that kind of thing. So that's my sort of quasi-populist attitude toward this stuff.

The great thing about your book is it says, yeah, that's also true for impulses which are really unpleasant and are morally reprehensible, like racism also is having that kind of effect. Then for all of us, maybe just a good reminder that economics, classical economics, and efficiency and fairness — if that's even measured by economics these days — is not really the only way to measure this. And that's what I felt like Steve Sheffrin's book was good about. It gave some dignity to the other arguments that said, "We need to take these seriously even if we don't like them or even if we find them reprehensible."

But I feel like your book really does do that. I want to ask you the forward-looking question that every interview ends with, which is like, all right — so you've told us that the public is confused by how complex the tax system is, and that we're divided by racial resentment. So what is the path forward if you really do like progressive taxes, and you think that rich people are superrich and getting richer every day, and the world cannot go on like that. What do you do? How do you save progressivity?

Andrea Campbell: Yeah, it's so tough. Well, one might be a little more simplification, that these tax breaks really are undermining the ability of people to clearly see the system. And we've done it before, and of course, all the tax breaks come back on like barnacles on a ship. And so it's tough to simplify this system, but that's one possibility.

Enforcement. There's the tax gap. I think it's $700 billion a year that the government doesn't collect in taxes owed. A little bit of that is ordinary people, but a lot of that is high-income, high-wealth people.

And right now, the IRS is being defunded. The extra money that they got in the Inflation Reduction Act during the Biden era is being chipped away. And so that tax gap is probably only going to grow, which gets at, raises people's moral hackles for the reasons that we just talked about. So enforcement would help a lot.

Could the U.S. ever have a VAT? I remember Monica Prasad once saying, if you look at our peer nations, they have progressive taxes, but they also have this big regressive tax that funds social welfare programs and so on in other countries. Maybe that's not the best way to do things, but it's one way that seems to work that we could observe in the real world. Maybe in the U.S., we get that down the road, although it's hard to introduce a new tax.

My fear is that we would get one half of the European bargain, but not get the other half. That we would replace part of our progressive income tax system with a regressive VAT and then never get the redistributed social spending. So then we would just undermine the regular people even more.

Joseph J. Thorndike: Well, I mean, that bargain worked for Social Security. That is our VAT, a generally less progressive tax, even possibly regressive tax, that funds a progressive spending program. I mean, it worked. But again, 1935, mid-'30s, it's many lifetimes ago. I'm not sure. Sometimes I wonder if that's really relevant anymore. But like you say, I think we could end up with a bad bargain.

Andrea Campbell: Yeah, exactly. Just the bad part. And then there's these other ideas that are being kicked around is that one reason that high-income, high-wealth people can slip the tax system is that they are not subject to third-party reporting in the same way that regular wage and salary earners are.

So you and I can't really hide our income because it's reported to the IRS, and the income tax is withheld and so on. But people with vastly more complicated ways in which they earn income and hold wealth can shift those sources around to whatever is most lightly taxed. And so is it possible to come up with taxes where they are subject to third-party reporting, like a financial transaction tax that's been kicked around by some politicians and some economists? Those are kinds of things that are possibly on the table.

Joseph J. Thorndike: Yeah. And all those make sense to me. I mean, it doesn't leave me feeling all that optimistic, but I mean, maybe it's just hard. It's the hard work. We didn't get progressive taxes quickly or easily, and so we might not be able to bolster them and get up and increase their importance and their bite easily either. It might be a long, hard slog. And actually, tariffs were what did it the last time, so maybe tariffs will do it again.

Andrea Campbell: There you go.

Joseph J. Thorndike: All right. Well, we are really out of time, but Andrea, it has been great to talk to you. I loved your book. I was so happy to see it. I was like "so much hard work for so long," so it is a great achievement. So thanks for being here today.

Andrea Campbell: Oh, well, thank you so much. It's been delightful.