Working Paper: NBER ID: w27816
Authors: Brad C. Nathan; Ricardo Perez-Truglia; Alejandro Zentner
Abstract: In the United States and many other countries, taxpayers can file a protest to legally reduce their property taxes. While tax protests can provide a unique opportunity to study the (un)willingness to pay taxes, they have received little attention from researchers. To fill that gap, we study what motivates households to protest their property taxes. Using a field experiment and a quasi-experiment, we show that both expected savings and filing frictions play significant roles. We estimate the magnitude of filing frictions using a money metric. We also discuss how low-cost interventions targeted at disadvantaged groups can mitigate existing economic and racial disparities in the system of tax appeals.
Keywords: tax protests; property taxes; household behavior; filing frictions; economic disparities
JEL Codes: C93; H2; H26; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| filing frictions (K41) | likelihood of protesting (D72) |
| expected tax savings (H20) | likelihood of protesting (D72) |
| marginal benefits from protesting (D61) | likelihood of protesting (D72) |
| reducing filing frictions (G51) | likelihood of protesting (D72) |
| extra aid letter (F35) | likelihood of protesting (D72) |