My Taxes are Too Darn High: Tax Protests as Revealed Preferences for Taxation

In all U.S. states, individuals can file a protest with the goal of legally reducing their property taxes. The decision to protest can provide unique revealed-preference evidence on individuals’ support for taxation in a high-stakes, naturally-occurring context. We study the motives for protesting taxes using administrative records and two sources of causal identification: a quasi-experiment and a large-scale natural field experiment. We show that, consistent with selfish motives, the decision to protest is highly elastic to the private benefits and private costs of protesting. We find evidence of fairness motives too: consistent with conditional cooperation, a higher perceived average tax rate decreases both households’ feelings of unfairness and their probabilities of protesting. Lastly, we study differences in protest choices between Democrats and Republicans.