Odd Lots - This Is How People Really Feel About Paying Taxes

Episode Date: November 16, 2020

The politics of taxes are always fraught. In theory, everyone wants to pay less of them and bristle at the prospect of paying more. But it turns out that our feelings are more complicated and nuanced. On this episode, we speak with Stefanie Stantcheva, a Harvard economist who has done deep survey work on how people really feel about taxes. What she's discovered could be useful going forward in terms of thinking about how to design the optimal policy.See omnystudio.com/listener for privacy information.

The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg this weekend. I'm Christina Rafini. We'll bring you the latest headlines, in-depth analysis, and big interviews. All the stories that hit home on your days off.

And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture. On Saturday mornings, we put the past week's, events into context, examining what happened in the markets and the world. That on Sundays we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television.

Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, radio. and wherever you get your podcasts. Hello and welcome to another episode of the All Thoughts podcast. I'm Tracy Allaway.

And I'm Joe Wisenthal. Joe, let's see. I know we keep putting caveats on all our episodes recently, but we are recording this with less than a week to go before the presidential election in the U.S. Yeah, just five days to go. Yeah. So the whole world could be different. By the time people are listening to this, this whole episode,

could just be like this weird time capsule from some normal time, or I guess not really normal these days, but from some totally different time. So hello from the past. So on that note, you know, everyone in D.C. is getting ready for the election. And at the same time, you can just imagine there are rooms filled with people, you know, with policy wonks who are trying to figure out what policy might look like under both, you know, another four years of Trump and also potentially. four years of Biden. Yeah. So I think like, you know, the first order of business, most people assume if there's a Biden administration would be some sort of major spending stimulus, sort of heavy running up the deficit in order to get the economy back to a trend or accelerate the return to full employment, then, you know, that's the kind of thing that people imagine could get passed in February. But if, you know, we're talking about a Biden administration or any Democratic administration in the future, then there would also be further policy questions beyond that. And one of those,

of course, would be the future of the tax system, which was reformed in the first Trump administration. Yeah. I mean, taxes have been a big talking point, you know, ever since Trump came in in 2016 and did a lot of stuff, including reducing the corporate tax rate. But the Biden tax program is also getting a lot of attention at the moment because he's talking about doing a tax hike for very wealthy individuals and also, I think, talking a little bit about maybe upping or imposing tax on capital gains. So clearly this is all in focus. Death and taxes are inevitable. The fact that all bots would do an episode on taxes, I suppose, is also inevitable. But I think one really interesting thing when it comes to tax policy is, you know, there is this idea among economists and

among policymakers that they're trying to balance a number of things here. They're trying to balance, I guess you would say, the efficiency costs of taxes with their benefits. So, you know, making society more equal, bringing in revenue for the government, obviously. And there's a tendency to look at that in a really rational way. But as hopefully a lot of people know already, the average person. on the street might have different ideas about the drawbacks or the benefits of taxes depending on their personal position, right? They're not necessarily thinking about it rationally.

No, people don't necessarily think about taxes rationally other than most people don't like paying them. And most people, all else equal, would like to pay less. But I do think, you know, it's interesting. And we'll get into this in the conversation. I have a, I feel like the salient of taxes as a political issue has gone down. There are a lot of people for whom cutting taxes, you know, it's this huge mantra for years. It's probably one of the defining elements of the GOP in the U.S. is that they're the party of tax cuts. And of course, Trump did cut taxes. But it feels like, you know, with everything else going on these days, we have so many cultural fights and COVID and other question, the salience of the tax number, which has already been cut a lot.

It feels like it has less political resonance. But we'll discuss that with our guests. Maybe that's just my bias. I don't know. Who knows if that's actually true? No, I think you're right. It just feels like there aren't like, you know, like tax cut Republicans. It used to just be such a thing and it feels like that people have sort of moved on. But who knows?

The good old days when the only thing people were really getting worked about was higher taxes. Yeah, easier times. A simpler time. All right. Well, that brings us quite nicely to our guest for this episode, I suppose. So we have Stephanie Sancheva. She's a professor of economics over at Harvard. She's done a lot of really interesting research on all types of policy, but specifically

she did a very good paper about taxes recently. She also, I think, just won the Elaine Bennett Research Prize, a very prestigious award in economics, and I think she's also been tipped as a future Nobel Prize winner. Hopefully, we're not jinxing it by saying that. But Stephanie, thank you so much for coming on. Thank you. It's my pleasure to be here. So I guess just to begin with, you know, you published this paper. I think it was back in August, and it was called Understanding Tax Policy. How do people reason? And the really interesting thing about this was you went out and you did a really massive and detailed survey about how people individually feel about taxes. Why did you decide to take that approach?

Yeah, so when I decided to do this project, it came from having experience with other such types of research where I've been trying to understand how we as citizens think about our public policies, the economy and society. you know, how we reason, what we perceive as fair, what shapes our views. I think this is very important, both for researchers and then for policymakers to understand in order to design policies that are better in line with our views as society. And I found it for this, the social economics lab at Harvard, where we do these large-scale social economics surveys, sometimes on several countries, to try and see how people reason, how people understand things. And, you know, the key idea is basically we need to listen more to people. And so this project on tax policy came from the idea that you hear a lot of things in the policy debate. Some of them economists would say are

accurate. Others, you may say, are quite misleading. And so I was very curious, what are sort of the mental maps, the mental models people use when they decide what tax policy to support, what tax policy to vote for. So do people ever like higher tax? So there's a lot of complex considerations that go into thinking about taxes for people. What I find is actually that the key factor in people's minds is how fair is the tax system. People care first and foremost about fairness. And what's interesting is that, of course, fairness is in the eye of the beholder. So do people like high taxes?

Yes, for some people who believe that it's actually unfair to have a lot of income inequality or a lot of wealth inequality. For those people, higher taxes would actually be considered fair. And so perhaps the complexity here is that fairness truly is in the eye of the beholder and means very different things to different people. So one of the interesting things about your paper is that you also do this research and you sort of talk to people along partisan lines. So I'm curious, does the idea of fairness change substantially, depending on whether you're Republican or Democrat? So our ideas about taxes actually look very divided along political lines.

And not just in the final policy views, if you want, whether we want higher or lower taxes that we already knew and we can easily see. But actually at every step of the reasoning about taxes, there are big political divides. So what are the considerations if you want that people have in mind and how are they divided along partisan lines? Well, the first thing people care about is what will be the economic effects of raising taxes or lowering taxes. The second thing they care about is who will benefit, who will gain, who will lose. And then the fairness concerns, I would summarize as how do we weight the gains and losses? How much weight do we put on the losers?

how much weight do we put on the winners here? People also care about their views of the government, how the government will spend that revenue, is the government efficient? Does the government have a lot of waste? And then finally, people also care about what they already know on the current tax system. And so at each of these steps,

there's actually big political divides. So to make this simple, if you're more on the left, on the Democrat side, then you actually think taxes have, lower economic costs. So higher taxes don't hurt the economy as much. You also think that in general, tax cuts, you know, at the top will really mainly benefit higher income people, as opposed to, if you're on the right where you believe in trickle down, namely that tax cuts on high incomes will benefit everyone else as well. It would be the tide that lifts all boats. If you're on the left,

you also tend to think that it's much more unfair to have so much income inequality or wealth inequality and you believe fundamentally people are not entitled to infinitely high incomes and that it's fair to tax away at least part of it. What's perhaps most striking is that there is partisan divide even on the perception of reality. That's what I call polarization of reality, which is even about the current tax system, how high is the top tax rate? Where does the top tax bracket start? How high is the estate tax, et cetera? Even there, there's actually divergence along political lines.

So in a nutshell, people who are on the left tend to think taxes are lower, less progressive, there's more income inequality than people on the right do. And what is striking is that these are things that one can actually look up. This is not a matter of opinion. This is a matter of current factual realities. So I want to talk a little bit more, you know, I'm curious, obviously, about what you've found, but I want to talk a little bit more about your methodology and your approach and why you think the survey going out and asking people is a good idea, because I'm curious if, like, you know,

someone came to me and said, like, oh, what are your views on the tax system or why do you support higher or lower taxes? You know, I might come up with some thoughtful thing about fairness because I'm talking to someone and I want to sound reasonable and I want to say, oh, well, it's very important for me to know that it's being spent well. And I want to say smart sounding, sophisticated things. But then then they leave and then I'm thinking, I just want lower taxes because I want to keep more money. So I'm curious about what you see is the advantages, the cost and benefits of the survey method towards getting people's opinions on what you just described are very political question. This is a great question. And let me give a bit of background to this methodology. So,

you know, the key idea is really that it's important to get into people's minds, into our minds as citizens. And there are things which we cannot see in other data and that we cannot extract with other methods. And these are these invisible things like perceptions, beliefs, attitudes, reasoning. And so we as economists have many tools based on large-scale data sets, but these invisible things will still not be seen in these other data sets. So in some sense, directly asking people is perhaps the best way to go here. What's important is, of course, that these surveys are not just opinion polls on the street, but actually carefully designed rigorous research tools.

So they're done online in a way that's very interactive. intuitive, walking people through a controlled order series of questions. And they're done in a completely anonymous way. So there's absolutely no social pressure. You can take it on your phone. You can take it alone in front of your browser. There is no surveyor in front of you.

So there's actually very little incentive to misreport. Let me just re-say that sentence. There's actually very little incentive to misreport your opinions as there is absolutely no social pressure around it. Now, the design is very critical. So I go through several blocks here to get a sense of really what's going on in people's minds, and I actually start with what you suggested,

which is a plain open-ended question to get actually people's gut reaction, which is, what are your main considerations about taxes? And then I can analyze these answers, you know, in a freely open-ended way, and it's very clear what sort of considerations come out everybody mentions fairness, people mentioned the middle class a lot, people worry about loopholes. But then I can drill down by walking people through more detailed questions.

So on the mechanisms of taxes. For instance, if taxes increased on higher incomes, what would you think the effects would be? Do you think higher incomes would be less entrepreneurial, save less, move states, work less, create less jobs, etc.? And so you can walk people through all these detailed reasonings and elicit much more detailed, you know, beyond the gut reaction responses. And so taken together, this relatively long and well-designed survey actually really shed some good light into what's going on in people's head. Canadian women are looking for more. More to themselves, their businesses, their elected leaders, and the world are out of them.

And that's why we're thrilled to introduce the Honest Talk podcast. I'm Jennifer Stewart. I'm Catherine Clark, and in this podcast, we interview Canada's most inspiring women. Entrepreneurs, artists, athletes, politicians, and newsmakers, all at different stages of their journey. So if you're looking to connect, then we hope you'll join us. Listen to the Honest Talk podcast on I Heart Radio or wherever you listen to your podcasts. One of the things that you did in the survey was you also, I think you showed people short videos that kind of explain how tax policy actually works. Could you maybe talk a little bit about that aspect of the research?

Yes. So my idea here was to see whether if we actually showed people simple explanatory videos, which are fully neutral, non-partisan, pedagogical, the way you may see in a plain introductory economics course, whether that could actually help improve understanding of taxes. And, I designed these videos to be short and fun, hopefully, easy to understand. And I simply vary the frame with which I show them. So for instance, one video will focus mainly on the distributional consequences of taxes. Essentially, who gains, who loses, to the best of our economics knowledge today. The other will focus only on the economic costs or benefits.

So what would be the effects on the economy? Will output be lower? Will there be economic costs? And then the third one actually brings these two together, and very much like economists would think, points out that there's always a trade-off between the costs and benefit of taxes, the benefits in terms of raising revenues,

possibly redistributing income, as much as is in line with your fairness and distributional inclinations. And there's the economic costs because taxes always change people's behaviors to some extent or company's behaviors, and so entail some economic costs, and that the right tax system is the one that actually balances these costs and benefits. And what I see is that these videos are actually quite effective,

although they're pretty short, they're actually quite effective in making people more aware of the tax system and also more supportive of progressive income taxes and more supportive also of the estate tax. And I noticed that the arguments that actually people care most about very much in line with what I said earlier are really the distributional impacts and the fairness impacts. So when people see the distributional impacts of taxes, how it could actually help lower income people or the middle class and actually smooth the income distribution a little bit, even if they become more aware of the economic cost as well, on balance, they tend to then side more. with being in support of progressive taxes. So you mentioned estate taxes just then.

I'm curious, did you find that the way people feel about estate taxes is different to the way they feel about income taxes? I don't know, I don't think your paper went into corporate taxes, but I'm just curious what your take is on variations and how people think about different types of taxes. So how do people think about different types of taxes? types of taxes. In the paper, I look at two major tools on the personal tax side, which are income taxes and the estate tax, which is a tax that is paid when someone passes away on the

estate they pass on to their heirs. And I think that for other types of taxes, the major considerations, which is, you know, what are your fairness views will also be probably the most important ones. In the case of income and estate taxes, the biggest difference is that people are actually much more unaware of how the estate tax works. The estate tax is a very unpopular tax in the U.S. It's sometimes called the death tax, which is obviously not a great name. And it's very disliked. What I find is that it's very disliked because people believe it's ultimately a double tax, which is a taxed as income that has already been taxed at some point. And it's also very unpopular because it's very misunderstood.

So for instance, in general, respondents think that around a third of all estates will end up paying the estate tax. And that couldn't be further from the truth. In fact, less than 1,000 estates will be subject to the estate tax. So it's actually a tax that kicks in very high in the wealth distribution that you may pass on. and people are unaware of that. So they believe, for instance, the chances that they or people they know or people like them will end up paying it is much higher than it actually is. But even there, the major considerations relate to fairness. And the estate tax is actually a great example to illustrate how complex fairness views can be.

And you or the listeners can think about themselves. How do you feel about the fairness of taxing away wealth that, that's passed on from parents to their children. Well, it's actually a very thorny ethical issue because if you take the perspective of children, then many people across the political spectrum agree that it's unfair for children, you know, just by virtue of being born in wealthier families,

to start with better amenities in life, start with more advantages in life, and then receive higher inheritances. So many people taking the perspective of children would feel that this is unfair and that we like equality of opportunity. We like to give everybody equal chances. And so if you just think about the children's perspective,

most people actually agree that it's fair to try to level the playing field a little bit by having an estate tax. But then flip it around and take the perspective of parents. So parents, you know, who have perhaps worked hard and saved in order to transmit wealth to their children, once we take that perspective, their people feel quite differently.

they feel, oh, it's actually perhaps not that fair to tax away the wealth of parents who have worked so hard to give money to their children. And by the way, even if parents have themselves inherited and were, you know, already wealthy when they were young, even there, people think it's not great from the perspective of the parents to tax this away. And so this is in conflict with each other because these two perspectives are fundamentally opposing each other. And so in the end, people have to face this ethical dilemma. And what I see is that on balance, in the end, people who are more on the left, on the Democrat side, tend to on balance say, okay, I'd rather have less inequality among children. I'd rather have more equality of opportunity among children,

even if that means I need to penalize some parents and tax away part of their states. And on the right, people tend to cite perhaps more with the parents and thinking, well, it's too bad. There will be unequal opportunities and inequality for children, but I still prefer to leave parents, you know, the right to pass on their wealth to their children tax-free. So how much the upshot of your research is essentially applicable to the political language that has to be used in any campaign or policy debate? So people have their views. We want to raise taxes. We want to cut taxes. How much does your reason? essentially sort of informed for either side the sort of framing that can be used to gather public

support. So I want to be very clear about my motivations here. My goal is to actually try and help people understand the workings of taxes better. And for that, the first step is actually, you know, the diagnostics stage, which is where does the disagreement lie? Where is the misunderstanding hidden, what is incoherent, perhaps in the reasoning or in the chain of reasoning. And so this is why I'm doing this project to actually identify how people think about tax policy. The goal, also by showing, for instance, these instructional videos, is to really see whether explanations, improving understanding can help people. And I have no wish to encourage people in one direction or the other, especially when it comes to Fannis considerations, which are very much your own individual or our own social, you know, prerogative to have.

But it's actually really about improving understanding. And I think that's very important because many people, sometimes actually from disadvantaged groups, by not understanding what policies do are not able to assess what, benefits or cause they will have to them. And I think giving people the tools to understand that means them being able to stand up more for themselves and make better decisions for themselves. And, you know, perhaps wishful thinking, but I'm also hoping that for many of these things, we can approach it from a more objective, nonpartisan angle and actually, you know, improve understanding rather than foster political differences. So I think your survey, just on that point, your survey is a sort of snapshot in time, but do you get the sense that people's views on taxes have solidified more along partisan lines in recent years? Like, do you think had you done the survey 20 or 30 years ago, do you think it would have shown as stark a split between attitudes?

It's a really hard question to say whether polarization has increased or not in the U.S. It depends on the issues and there isn't so much detailed like the way we would do today survey data going back in time to be able to say this. However, what is clear is that because there's partisan gaps at every single step, including on the views of reality, they are clearly quite deeply anchored. And so I think it's unsurprising in the end going through these chains of reasonings that we have very different views about tax policy on both sides of the political spectrum. Now, this is not true for all policies. This is only part of the big research agenda. And I've looked at other policies like health insurance or trade policy. And partisan gaps are actually not that large or look very different on other policies.

So on health policy, for instance, people on the left and the right actually reason very similarly about the economic effects of health insurance, of the benefits in terms of distribution or helping the sick or helping lower income families. The reasoning is actually extremely similar on both sides of the political spectrum. However, once we go to the final policy views and, for instance, ask, would you support, you know, a single payer health insurance? would you support a version of Medicare for all? They're actually, regardless of the previous reasoning,

people revert very much back to party lines. And so a gap appears in the final policy views, although it's very hard to detect any difference in how people actually reason about these policies. That's super interesting to me. I mean, one of the questions, and it comes up at all sorts of political discussions is, do people really ever change their minds

when presented with new evidence. So maybe some people have some idea. They're like, oh, I think the tax rate is here. Turns out the tax rate is much lower. Do they actually change their minds on policy? Or do they come up with some new reason? Does the mind automatically backfill some new sort of empirical explanation to support what is their sort of a political leaning?

So obviously our brains are very complex instruments. and we tend to have a lot of biases, and I say we because it really affects all of us. But I think it depends very much on the issue whether information can improve or change people's minds. So in the case of tax policy, as I explained, actually people are open, it seems, to, you know, explanatory videos or clear pedagogical explanations of how tax policy works. that's not true for all issues. So I've looked at issues like immigration, mobility, social mobility in the U.S., inequality, views of the government, and it really varies. For instance, when it comes to immigration, and that's not just true for the U.S.,

that's true for all the countries in the survey, which includes many European countries. On immigration, people seem to be very sensitive, mostly to narratives, to stories about immigrants, but facts about the actual number of immigrants, how well-educated they are, where they come from, how much they contribute to the economy, that barely shifts anyone's minds. And so it really varies and it depends on the issue under consideration. But I have to say one thing which is that as economists, I think we have a very big duty to actually remain incredibly neutral and scientific. You know, economics is a science. It's a difficult one because we deal with complex systems like the economy and people. And so it's a difficult science, but it is a science using models, using data. And I think it's our really our duty to remain very nonpartisan, very neutral, and to do our best to actually inform people about what we find, what we discover on the workings of the economy.

And hopefully that will also grant people some choice. trust and confidence that we're simply trying to convey the knowledge that we have not to influence them in one direction or the other. Canadian women are looking for more. More to themselves, their businesses, their elected leaders, and the world are at them. And that's why we're thrilled to introduce the Honest Talk podcast. I'm Jennifer Stewart. And I'm Catherine Clark.

And in this podcast, we interview Canada's most inspiring women. Entrepreneurs, artists, athletes, politicians, and newsmakers, all at different stages of their journey. So if you're looking to connect, then we hope you'll join us. Listen to the Honest Talk podcast on IHeartRadio or wherever you listen to your podcasts. On April 4th, 23, around two in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash. From Bloomberg Podcasts, this is Foundering, The Killing of Bob Lee, beginning April 16.

I have a slightly weird question, but a lot of the concepts we're talking about, well, we're talking about how people perceive fairness, but a lot of it also seems to touch on collectivism versus individualism. So what's best for all of society or the economy versus what's best for me specifically. how much of your research could be applied, for instance, to the policy response to coronavirus in the U.S. and how people are reacting to that. So the response to the coronavirus is obviously a very topical and pressing issue right now. We did a very large-scale survey in 15 countries. So we have more than 380,000 respondents across 15 countries, among which the U.S. and it's been running since March.

And so we've been able to follow people's views on the restrictions put in place and how much they're willing to tolerate how they trade off the health risk, whether it's their own health risk or the public health risk, against their civil liberties. And civil liberties means, you know, the right to move around, the right for free expression, freedom of the press, democracy being respected. etc. And what we can see is that this trade-off fundamentally differs across countries.

So actually, a country like the U.S., relative to some European countries like Spain or Italy, is much less willing to trade off their civil liberties for health benefits. Actually, the country that's most willing to trade off those liberties is China. And then at the other end of the spectrum, we have U.S. and Japan, which are the least willing to give up their rights. France and Germany trail very closely behind the U.S. So they're also reluctant to give up civil liberties for health. And then countries that were hit perhaps very drastically early on and had a real traumatic experience like Italy are much more willing to give up civil liberties. But this varies within country across people.

So people who are themselves at a higher health risk. And you can predict health risk based on the medical models. So their inputs are, you know, age, preexisting conditions. So people who are at higher health risk themselves are much more willing to have restrictions imposed and give up their own liberties and accept restrictions for all of society, you know, for the public health benefit. So that's true within country. And the other thing that's true is that's true is that. that these things are changing over time.

So as we're able to track people, the willingness to give up rights mirrors the worries about health. And so as the worries about health have declined over the summer and actually are now only ticking up again, we see exactly the same pattern for your willingness to accept restrictions or to give up rights. The willingness to give up rights declined over the whole summer and then now is ticking up slightly again in different places as we see second or even third waves appearing.

And so I think what this implies is that, you know, first of all, it's very important to have safeguards in place because clearly if people are willing to give up their rights, it's only temporary. And so it's important in democracies that this is, you know, ensured to be temporary. And this can actually then encourage people to accept restrictions in the short run because they know they will be temporary. Another thing, again, related to the understanding part is in that project two, we actually explain to people who want the benefits of various restrictive measures. You know, what's the benefit of having partial or full lockdowns of imposing some restrictions? What's the gain in terms of flattening the curve or reusing cases?

And once people actually see these explanations, they become much more willing to comply with those restrictions. And so I think the second big lesson is that it's important for policymakers to explain to people why something is being done, to explain the reasoning behind it, and to give people, you know, the tools to understand why something is happening or not. So especially as our, you know, medical understanding is progressing about how this virus looks like and what is beneficial, what is not. Obviously, we didn't know everything at all back in March. We're still figuring so many things out, it's very important to inform the public and be very neutral and rigorous about how that's done. Do you feel as though the salience of tax is diminished as a political hot button

issue? When I hear a politician say, I'm going to come out and cut taxes, there's something kind of retro about it to me. Like, it makes me think of like political fights in the 80s and 90s when I was growing up. And I'm just curious if in your research, A, that's the case, that maybe it's like, terms of people's main things they think about the case that is diminished. And B, does that create openings for more flexibility for tax policy changes if it isn't the number one thing on people's minds? So are taxes diminishing an importance in people's minds? Well, the first thing to say is that taxes are actually all the time there and they're an incredibly powerful tool because they affect basically all stages of the economy. And if we get tax,

is wrong. It can have very damaging effect. On the other hand, you know, a well-designed tax system can both raise revenues, redistribute income, for inclined to do so, and at the same time, not hurt productivity, competitivity, etc. So taxes will always be, you know, a gigantic public policy issue. How much people focus on them depends obviously on what else is going, is going on. But the current COVID-19 crisis actually really highlighted some fault lines in in the economy between people, you know, who are able to weather such crisis well and people who are really left behind from it. In addition, it costs, you know, governments throughout the world, gigantic sums of money. And so very quickly, the issue of how to make up for that fiscal

deficit, how to make up for the shortfall in revenues will come to the table. And we will have to take a very hard look at how to change the tax system, how to design it better, and what to do ultimately to get this revenue. So I think perhaps sadly it will become a very pressing issue in the not too distant future. Stephanie, thanks for coming on a really interesting approach to a lot of these topics. And yeah, I just recommend that people who are listening to this actually go and check out some of your research, including the paper on tax, understanding tax policy, how do people reason? Thank you so much. Thank you. Thanks, Tracy and Joe. Bye-bye.

So, Joe, I enjoyed that conversation, even though I guess not many people like talking about taxes. But I do think Stephanie's approach to examining the topic is really interesting. And I kind of wonder what other policy insights you could get from these big surveys. Yeah, you know, something that she said that really struck with me was her point about how a lot of people with different viewpoints. actually share some common assumptions and even common reasoning. Right. And then the flip actually happens with a partisan association. So it's like, yeah, I think it's wrong that some children get a huge leg up from inheritance or whatever it is.

And there may be a lot of agreement on that. But ultimately in the end, it's like the sort of like political affiliation of the estate tax ends up trumping one sort of prior intuitions that you would that people, that you would. theoretically used to arrive at a conclusion. Right. It sort of reminds me of like math homework where everyone is working out the problem in a similar way, but coming to very different answers. It would actually be like, you know, it's an interesting question though, like whether that's changed over time, whether, you know, it's like someone who identifies as a Democrat, regardless of their reasoning ends up, ends up supporting the Democrat policy, someone who identifies a Republican, regardless of their personal intuitions, ends up supporting the policy that's the

official plank of Republicans. I mean, it seems like because people are just the level of partisanship is extremely high these days. Yeah. But I think that's going to be like now that we have some of these surveys going on, I think it's going to be really interesting to see this data evolve over the next 10 or 20 years, right? We have it now. And you can sort of trace how attitudes are shifting and whether or not polarization is actually increasing. Yeah. And, you know, look, I think obviously, I'm kind of skeptical. I mean, again, by the time people are listening to this, we'll probably know who the next president it is. But man, it's tough to raise. It seems politically tough to raise taxes, period, in any, in any, in any,

in any environment, doesn't it? Yeah. I think you'd have to calibrate. Well, I don't know. Look, The world may change, but you may have an answer to that question very, very soon, I think. Less than a week now. Right. Yeah. Okay, well, we'll see. I'm really worried when this episode comes out that everything we've just spoken about will be irrelevant and all our work will be for not. Well, we'll just apply it to the 2024 election.

Okay, how much to rerun everything. Okay. To those of you who are listening, thank you very much. and this has been another episode of the All Thoughts podcast. I'm Tracy Allaway. You can follow me on Twitter at Tracy Allo. And I'm Jill Wisenthall. You can follow me on Twitter at the stalwart.

And you should follow our guest on Twitter, Stephanie Stancheva. She's at S. Stancheva. Follow our producer, Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of a podcast, Francesco Levy, at Francesco Today. And check out all of our podcasts under the handle at podcasts. And if you enjoyed this episode or any others, we'd appreciate it if you went to Apple Podcasts and gave us a five-star review so that more people discovered odd lots. Thanks for listening. I'm June Grasso, inviting you to join me for the Bloomberg Law podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world.

Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets. from corporate law to constitutional law and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars, and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast. Search for Bloomberg Law on YouTube, Apple, Spotify, or anywhere else you listen. On the East Coast, listen as you start.

your day and on the West Coast catch up in the evening. That's the Bloomberg Law podcast with me, June Grosso. Subscribe today wherever you get your podcast.