My Taxes Are Too Darn High: Why Do Households Protest Their Taxes?

Nathan, Brad; Perez-Truglia, Ricardo; Zentner, Alejandro

doi:10.1257/pol.20220768

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.

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