Taxing the Rich: It’s Complicated

Tax cuts are a perpetual debate in contemporary American politics. Last time the GOP controlled both chambers and the White House during Trump’s first term, they succeeded in enacting a similarly large tax reduction package. In fact, the “big beautiful bill” makes many of the 2017 tax cuts permanent. Before Trump’s election in 2016, a unified Republican Congress passed two rounds of tax cuts—in 2001 and 2003—during George W. Bush’s administration. Going back even further, Ronald Reagan achieved the same feat in both 1981 and 1986 when Republicans controlled the Senate for six years.

Over this 45-year time span, the debate over taxes has tended to focus on a single issue: the policy implications of reducing taxes that will disproportionately go to high-income Americans.

For example, conservative economists in the 1980s proposed that cutting the top marginal tax rate (70% at that time) would generate greater government revenue, not less, due to increased production and employment. George H.W. Bush called this theory, known as the Laffer Curve, “voodoo economics” when he ran against Reagan in the 1980 GOP primary (for an overview see Domitrovic 2021 on the emergence of supply-side economics). As far as the recently enacted legislation, Trump echoes these arguments, calling it the most “pro-growth” and “pro-worker” law in American history (White House 2025).

Critics of these claims abound, mostly among left-leaning economists. For example, Joseph Stiglitz has argued that the post-World War II experiment with “trickled-down economics” failed to achieve its primary policy objectives (Stiglitz 2015). Others argue that the sharp reduction in the top marginal tax rate has led to greater income inequality rather than a universal “rising tide” (Piketty and Saez 2007). A more recent article by David Hope and Julian Limberg (2022) supports these two claims—across eighteen OECD nations over the last fifty years, reduced tax progressivity has caused greater income inequality while having no discernable effect on economic growth or employment.

I want to sidestep these policy debates and instead focus on a neglected part of the discussion: what the American public thinks about tax cuts. Specifically, why do Americans support or oppose tax cuts that primarily go to the wealthy on a per dollar basis? If there is one core argument in this piece, it is that the American public has complex and often contradictory views about progressive taxation. A key aspect of this claim is my research showing that Americans’ preferences for raising or lower taxes on the rich are largely informed stereotypes about “the rich” as a group (Ragusa 2015, 2017). Simply put, whether one wants high-income Americans to pay more or less in taxes hinges on whether they view the rich in positive or negative terms.

Although a lot depends on question wording, surveys consistently show that Americans want the rich to pay more in taxes. For example, the 2024 Cooperative Election Study (CES) asked if “taxes on individuals earning $400,000 should rise.” A sizable majority of 69% said they support such a proposal. A recent poll by the Hoover Institution produced a nearly identical estimate despite differences in question wording—66% support having “high-income earners pay a larger share of federal income taxes.” Data from Pew show majorities support raising taxes on wealthy households as well. On a recent survey, 58% said “tax rates on household income over $400,000 should be raised” while only 19% said these households should pay less in taxes.

It should be noted that support for increasing taxes on the rich is a relatively recent phenomenon. Gallup data from 1939, at the end of the Great Depression, showed that large majorities opposed “redistributing wealth” by levying “heavy taxes on the rich.” Sixty years later in 1998 when Gallup asked the same question, a majority of Americans continued to oppose such a proposal, albeit somewhat narrowly (51% to 45%). However, the most recent Gallup polls (in 2013, 2015, 2016 and 2022) show majorities support increasing taxes on the rich to redistributive wealth.

But why do so many Americans today support raising taxes on high-income households? On its face, this seems like a rather simple question. Economic self-interest, ideology, and views on income inequality are all intuitive answers. And yet these explanations are either incomplete or wrong.

A logical starting point is to consider raw economic self-interest. It stands to reason that high income Americans, who constitute a small share of the public, want their taxes to decrease, while low- and middle-income Americans want taxes on the rich to go up (presumably to pay for greater social services). Although certainly logical, there is mixed evidence on this hypothesis.

For example, an often-cited review essay by Sears and Funk (1990) aptly titled “the limited effect of economic self-interest on the political attitudes of the mass public” found that attitudes towards taxation are shaped by economic self-interest only when the size of the tax reduction is substantially large and obvious. In most cases, self-interest is a moderate to poor predictor of Americans views on economic policies, according to Sears and Funk. I found a similar result in one of my papers on this subject—a measure of income was a poor predictor of whether Americans said they wanted taxes on the rich to go up or down (Ragusa 2015).

Digging deeper into the CES data cited above, only one income bracket in 2024—those making over $500,000 per year—opposed a hypothetical plan to increase taxes on individuals earning over $400,000 per year. For respondents in the second highest income bracket—Americans earning between $350,000 and $499,999 per year—a majority supported a tax increase on high-income earners even though many of these respondents would see their taxes increase. Conversely, there are many in the lowest CES income brackets that say they want high-income earners to pay less in taxes.

As far as why income is at best a modest correlate of views on taxing the rich, one answer is that a complex set intersecting ideals mute the effect of economic self-interest. Compared to citizens in many European nations, Americans report a stronger commitment to ideals like individual liberty, upward mobility, and equality of opportunity (Hochschild 1981).

Recent research supports this contention. For example, a survey experiment by Ballard-Rossa, Martin and Scheve (2017) found that respondents who said one’s economic success is explained more by “hard work” rather than “luck” had less progressive views on taxation. A study by Hope, Limberg, and Weber (2023) found a similar result—wealth obtained from an inheritance reduces support for tax cuts that benefit the rich. Critically, however, in the Ballard-Rossa, Martin and Scheve study, even those who cited “hard work” as the source of a person’s economic success had progressive preferences on balance.

A second possibility is that ideological considerations supersede economic self-interest. Although counterintuitive, a substantial body of work shows that Americans have “sociotropic,” or other focused, views that override their “pocketbook” motivations. In simple terms, low-income conservatives may prefer a less progressive tax structure for ideological reasons (e.g., limited government and individual liberty) while high-income liberals may prefer a more progressive tax structure (e.g., to promote equality).

Public opinion polling confirms that Americans have ideologically motivated tax policy attitudes. For example, the Pew survey digs into this issue by providing crosstabs by both party and income. For Democrats, support for taxing the rich increases with income. In other words, Democrats in the highest income bracket are the most supportive of raising taxes on wealthy households. For Republicans it is the opposite—low-income Republicans are among the most opposed to taxing the rich. (A likely explanation for this counter intuitive finding is the effect of education on tax policy preferences.) Academic studies show similar ideological and partisan results (Ballard-Rossa, Martin, and Scheve 2017).

An unresolved question remains, however: why do so many Americans support raising taxes on the rich, including many self-proclaimed conservatives? On the Cooperative Election Study (CES) survey, a whopping 44% of self-described “conservative” and 34% of self-described “very conservative” respondents say they support raising taxes on the rich. Simply put, ideology, on its own, is a strong but imperfect explanation for Americans tax policy preferences.

A third possibility is that opinions on taxing the rich are not explained by an overarching ideology, which many Americans do not possess in the first place (Converse 1964), but by a specific set of policy objectives. For example, Americans often say they are concerned about the income gap between the rich and poor, so perhaps many want to raise taxes on the rich to alleviate inequality and increase government spending (while those who are unconcerned about inequality want the rich to pay less in taxes).

Although there is disagreement in the literature, academic research has tended to refute this hypothesis, however. A famous study by Bartels (2005) concluded that many Americans have what he termed “unenlightened self-interest” (though see the Hope, Limberg and Weber 2023 study). Although Bartels found that there was a relationship between support for the two Bush era tax cuts and one’s perceived tax burden, attitudes were unrelated to broader views on income inequality in Bartels’ study. For example, those who said they were concerned about inequality were just as likely to say they supported the repeal of the estate tax, which increased the wealth gap. Bartels concluded that public attitudes were “ill-informed [and] incentive to some of the most important implications of the tax cuts” (page 15).

In summary, economic self-interest and one’s policy views are imperfect explanations of Americans (rather complex) views on taxing the rich. My research suggests another factor plays a key role: socioeconomic stereotypes. A lengthy literature documents that stereotypes about groups affected by a policy powerfully shape how citizens think about that policy. In the economic realm, studies have shown that stereotypes about targeted groups shape attitudes toward welfare (see Fox, 2004 and Gilens, 1996, 1999) and social security (see Winter 2006) for example.

From a theoretical standpoint, stereotypes operate as heuristics that simplify one’s thinking about a complex policy matter. In this literature, deservingness stereotypes are found to be particularly powerful. In brief, the concept of deservingness captures whether one thinks the targeted group has “earned” some beneficial policy outcome from the government.

I examined this possibility with survey data that asked Americans to describe the rich in an open-ended format (Ragusa 2015). As you might imagine, the survey elicited a range of responses—some of the most frequent descriptions of the rich ere “highly educated,” “hard working,” “good job,” “arrogant,” “inheritance,” “luck,” “political influence,” and “drive expensive cars.”

My analysis shows that these stereotypes powerfully shape views on taxing the rich (controlling for ideology, income, education, and a range of other factors). From a statistical standpoint, the analysis indicates that socioeconomic stereotypes have a similar effect size as ideology. As you might expect, respondents who described the rich using positive terms were much more likely to say they should pay less in taxes while those who described the rich using negative terms wanted the rich should pay more in taxes.

All in all, Americans stereotype the rich—like other groups in society—and these stereotypes help reconcile seemingly contradictory views about the merits of raising or lowering taxes on high-income Americans (e.g. why support is so high in the abstract and why many self-described conservatives want taxes on the rich to go up). Indeed, the survey showed that most people have at least one negative stereotype about the rich, while a follow up study showed that modern media framing has increasingly focused on the rich as a group (Ragusa 2017).

Not all stereotypes are the same, however. Respondents who described the rich using dispositional and prosocial terms were the most likely to say taxes on them should go down. In the literature “dispositional” refers to whether a targeted group is responsible for their circumstance (e.g. the rich became wealthy because of hard work) while the term “prosocial” is about whether the group is a net benefit to society (e.g. the rich are job creators). Conversely, Americans with situational and antisocial views of the rich (e.g., the rich became wealthy as a result of inherited wealth and are selfish) are those most in favor of having the rich pay more in taxes.

An overarching conclusion that emerges from the above is that Americans have a mix of complex, irrational and often ill-informed views on tax policy. Bryan Caplan’s excellent book The Myth of the Rational Voter (2008) studies this issue in far greater detail and makes a convincing case as to Americans’ inability to make sound economic decisions. In brief, Caplan argues that a downside to representative democracy is that voters often get what they want—that is, unenlightened policy outcomes. It isn’t just that people are uninformed. Rather, Caplan documents that people form their policy opinions on a mix of ideology, emotion, and biased thinking rather than fundamental economic principles.

One piece of Caplan’s book that does not seem to fit taxing the rich specifically is his suggestion that voters’ biased decision-making leads to popular but economically unwise policies that pass. After all, cutting taxes on the rich is unpopular yet was recently enacted by Congress (just like the last time Trump was president in 2017). How can we reconcile this apparent inconsistency? I think there are two answers.

First, Caplan argues there isn’t a perfect “1-1” relationship between what the public wants and what the public gets. Issue salience is a key moderating variable. When the public holds strong beliefs, the people are more likely to get their preferred outcome (even if it is irrational or ill informed). But when voters hold weak beliefs, lawmakers have greater flexibility and those policies are less likely to pass. Given everything cited above, I think it is fair to say voters have highly malleable and thus weak positions when it comes to taxing the rich.

A second possibility is that Americans actually don’t want the rich to pay more in taxes. In fact, you could argue the opposite. Although popular when asked about in the abstract, surveys that force Americans to select an appropriate level of taxation often show far less support for raising taxes on high-income individuals and households.

For example, the Hoover Institution data cited earlier purported to show that 66% want high-income Americans to pay a larger share of federal incomes taxes. And yet a follow-up question revealed that 73% want a top tax rate that was less than what high-income earners currently pay. Ballard-Rosa, Martin and Scheve’s (2017) study found a similar result— although people prefer a more progressive tax structure in the abstract, when forced to set hypnotical tax rates, Americans’ answers don’t differ very much from current tax rates.

In conclusion, Americans opinions on taxing high-income earners are complex and often contradictory, despite the strong opinions on the side of raising taxes on the rich in the abstract. Given the central role that taxation plays in domestic politics, this is cause for concern as it suggests the public is ill equipped to perform one of their basic duties.

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*Jordan Ragusa is a professor in the political science department at the College of Charleston. His research focuses on several intersecting topics: American and South Carolina politics, the Congress, political parties, elections, political economy, and statistical methods for the social sciences. He is the author of two books: Congress in Reverse: Repeals from Reconstruction to the Present and First in the South: Why the South Carolina Presidential Primary Matters.

For more articles by Jordan Ragusa, see the Archive.

This article was edited by Features Editor Ed Lopez.