Why efforts to raise taxes in the United States consistently fail

Today, only 1 in 4 Americans trust that their government will do the right thing. This trust began declining significantly in the 1960s due to the Vietnam war and has not surpassed 30% since 2007. This has important implications for many aspects of society, however, I will focus on the impact this lack of trust has on taxation.

Research suggests that the level of trust that people have for the government is related to how likely they are to comply with its demands. This holds true when it comes to the willingness to pay taxes, as this is a form of regulatory compliance. Tax revenue is important for the proper functioning of government and is needed for the successful implementation of the many government programs that improve the lives of everyday citizens.

The OECD has determined that there are five policy dimensions that influence trust in government: responsiveness, reliability, integrity, openness, and fairness. I will examine each of these dimensions as they pertain to low level of trust for the government in the United States.

Responsiveness

This dimension refers to providing and regulating public services, a broad category that includes things such as education, infrastructure, waste management, and public transportation.

It shouldn’t be a surprise that this is an area that the United States does not score particularly well on. The infrastructure is crumbling and in disrepair; this year the American Society of Civil Engineers gave the overall infrastructure a C-minus, and the US ranked 13th for overall infrastructure in 2019. It is unlikely that these issues will be resolved anytime soon, as congress is currently divided over the passage of a massive infrastructure bill that would allocate $579 billion to repair and improve infrastructure nationwide.

Education quality has long been lagging behind many other developed nations, as the education budget shrinks and teacher salaries stagnate in much of the country. In 2018, the US was ranked 38th globally among math scores and 24th in science.

Reliability

A government that is able to anticipate changes and protect its citizens is seen as reliable. The COVID-19 pandemic has provided ample opportunities for governments around the world to appear incompetent and grossly unprepared as they struggle to deal with a once-in-a-century catastrophe. Under President Trump’s leadership, the United States failed to recognize the severity of the pandemic until it was much too late, and hundreds of thousands of people lost their lives unnecessarily.

This is far from the only example of the US government failing to protect its citizens, however. Take gun violence, for example. Over 15,000 people were killed by guns in 2019, and this figure does not include suicides. Unlike a pandemic, gun violence is a predictable phenomenon that continues to be ignored. Despite thousands of Americans being murdered by firearms each year, and countless mass shootings annually, the US government refuses to enact gun control measures that are supported by the majority of Americans. There is evidence that certain types of gun control legislation has an effect on gun violence, however, the current background check system is far from perfect and has allowed dangerous people to purchase guns.

Integrity

Integrity here refers to a government using power and public resources ethically. The United States has a checkered past in this dimension as well. In the realm of public health (which is very relevant during the current pandemic), there is the infamous Tuskegee Syphilis Experiment. In this study, African Americans were mislead into thinking they were receiving treatment for syphilis, while in reality the goal of the study was simply to observe what long-term, untreated syphilis looked like (it is deadly). This study lasted 40 years, over 100 of the subjects died, even when a treatment for syphilis was easily available. This study could be part of the reason for the distrust in the COVID19 vaccine among some of the African American population today.

Openness

A government with a focus on openness listens, consults, engages and explains its actions to its citizens. This value is quite interesting to examine. In regards to consulting citizens, there is clear evidence that laws are often passed that are not supported by the majority of Americans. Take access to abortion — 59% of Americans think it should be legal in all or most cases, yet access to abortion continues to be challenged in both state and federal courts.

Even more damning, however, is research from Princeton that found that preferences of average citizens towards a particular policy have essentially no effect on the outcome of legislation. Meaning that even if virtually every single average American supported a particular measure, it would have the same chance of passing as if zero average Americans supported it. This changes drastically when you look at the preferences of the wealthy (top 10% of income earners). Their preferences had a much more sizable effect on the outcome of legislation since this group is, among other things, able to donate significantly to candidates and afford lobbyists.

The research from Princeton makes it clear that the US government does not listen to or consult ‘average’ citizens, instead focusing on the elite whose campaign contributions and lobbyists sway the views of lawmakers.

Fairness

Governments should try to improve the living conditions of all their citizens — this would be a fair government. Unfortunately, in the US we see time and time again that many policies, including the Trump-era tax cuts, primarily benefit the wealthy.

Going back less than 100 years and the US still had segregated schools and African Americans were barred from certain aspects of society. The remnants of these racist policies can still be seen today. The (now illegal) process of redlining helps explain why the wealth of a black family in America is around 10% of the wealth of a white family. Redlining prevented African Americans from buying a home, and home ownership is where most Americans derive their wealth from.

If we feel as if our government is not treating us fairly, it is only natural for our trust in it to wane.

As you can see, there are valid reasons for the low level of trust in the United States government from some citizens. Of course, the examples I used are only a very small selection and one could easily find many more examples to back up the claim that the US has failed on some level across all of the above values. For those that do feel as if the US has let them down, its easy to imagine why they would be against any tax increases.

All of this leads to a vicious cycle. No one wants to pay taxes because they don’t feel like they are getting any sort of return on their investment. This is because a functional government requires ample resources (money) in order to be functional. But because the government is underfunded, people feel like the government is useless and they are less likely to want to pay taxes, making the government even more underfunded. Rinse and repeat.

This has important implications — because of the public sentiment against any tax increases, politicians never run on a platform of raising taxes and improving the functioning of the government. They would rather utilize other forms of austerity measures such as dismantling the social safety net which further erodes people’s trust in government. And the cycle continues once more…