In his paper, Homer Gets a Tax Cut: Inequality and Public Policy in the American Mind, Larry Bartels studies the mystery of why most Americans support repeal of the estate tax, even at the same time that they believe the rich should pay more in taxes.
For example, as described in Bartels’s article for The American Prospect,
In the sample as a whole, almost 70 percent favored repeal [of the estate tax]. But even among people with family incomes of less than $50,000 (about half the sample), 66 percent favored repeal. . . . Among people who said that the difference in incomes between rich and poor has increased in the past 20 years and that it is a bad thing, 66 percent favored repeal. . . . Among people who said that the rich are asked to pay too little in federal income taxes (more than half the sample), 68 percent favored repeal. And, most remarkably, among those respondents sharing all of these characteristics — the 11 percent of the sample with the strongest conceivable set of reasons to support the estate tax — 66 percent favored repeal.
Bartels’s basic explanation of this pattern is that most people are confused, and they (mistakenly) think the estate tax repeal will benefit them personally.
His explanation sounds reasonable to me, at least in explaining many peoples’ preferences on the issue. But I wonder if ideology can explain some of it, too. If you hold generally conservative views of the economy and politics, then the estate tax might seem unfair–and having this norm of fairness would be consistent with other views such as “the rich should have to pay their share.” The point is that voters don’t necessarily think in terms of total tax burden; rather, they can legitimately view each separate tax on its own and rate it with regard to fairness, effectiveness, etc.
Statistically, I’m envisioning a mixture model of different types of voters, some of whom support tax cuts for ideological reasons (I don’t mean to “ideological” negatively here–I’m just referring to those people who tend to support tax cuts on principle), others who support the estate tax repeal because they (generally falsely) think it benefits them, and of course others who oppose repeal for various reasons. A mixture model might be able to separate these different groups more effectively than can be done using simple regressions.
Larry Bartels commented:
It is clear from the simple regressions that partisanship and ideology matter. It is not obvious to me why ideological principles should matter more for the estate tax than for other kinds of taxation, and indeed it appears from comparing the regressions for repealing the estate tax and supporting the 2001 Bush tax cut that the effects of ideology are similar for both (while partisanship matters more for supporting the 2001 tax cut than for repealing the estate tax).
I have no doubt that these coefficients (indeed, ANY regression coefficients estimated from survey data) represent, at best, rough averages of very heterogeneous individual effects. So a mixture model seems attractive in principle. The problem, I think, is to specify clearly who is in what camp and why, in order to avoid post-hoc story-telling of the sort that gave exploratory factor analysis a bad name. In this case, the problem is complicated by the fact that we don't have direct questions about the "fairness" of either tax, or about specific assessments of self-interest; so those would presumably have to be inferred from the relative weights attached to ideology and "own tax burden," respectively.
Andrew commented:
In response to Larry (with Larry's responses to my responses):
AG: Yes, I agree that it's easier to talk about a mixture model than to set it up and interpret it. I was just thinking that some sort of mixed description could ultimately get at the motivation of all the voters. Perhaps of the 65% who support the estate tax, 30% are Homer Simpsons and 35% are antitax conservatives.
LB: I suspect many people are a bit of both.
AG: I also wonder whether the anti-repeal argument ("The estate tax affects only 1% of the population") leads people to wrongly think it's a big deal. Perhaps the thought process is: "Hey, it's a cheap way to simplify the tax code." Do people fully realize that many billions are at stake?
LB: I don't think most people are good with magnitudes. There is some evidence that if you offer them a concrete choice between this tax and some other tax that would generate a similar amount of revenue, most are happy to tax dead people. But that isn't the way the political process works.
AG: That makes sense.