I im just so happy that about a year ago we were joined at the brookings institutions and the promptly produced this great book having been here for a short time. I will go through the former the formal intro. Vanessa has written two books and coauthored the first. The first one is called the tea party and the remaking of american conservatism. It shows a very strong conviction but in her Tea Party Book she showed an enormous capacity people she profoundly this a grease with. Just to tell you how we are going to do this vanessa will come and talk about this great book in her finance i will introduce a pair of respondents. And then we will bring you all into the conversation. She is a coauthor of the tea party. It was named one of the ten best political books of the year. She is also examining the political origins. She has testified before congress she is written from friday a publications not only the New York Times and the atlantic but also teen vogue and also her hometown newspaper the sacramento bee. She has been cited all over the place by economist. She received her phd in government and social policy from harvard university. She has a masters degree from the institute of french studies. She will do a side lecture. I love having you as a colleague vanessa and congratulations on the book. [applause]. Thank you. My goal today is to convince you that american see tax pain is something to be proud of. Ive studied this for six years. I watch what people do when they vote. And in america to pay taxes is something almost universally understood as a civic duty and a moral obligation. In this political moment ive set myself a difficult task in committing you of this. They describe tax avoidance is a smart choice. We will see major tax reform policy. They were aimed at the wealthiest among us. They had struggled with major budget shortfalls. In this context how can it be that americans are proud to pay taxes. Are we in fact and nation having to drowned the government in a bathtub. I dont want to discount the views of conservative americans. It was actually at a tea party rally that the question i try to answer in this book first occurred to me. I know how common it wasnt to describe it. At the end of the sentence was almost never about taxes. It was about the right to be heard. In america even for the conservative americans using it as a shorthand for being could you didnt citizen who has earned in this country and has earned representation by the government. In seen taxpayers commitment to community and country they are in fact a part of a very long tradition. Into demonstrate the worthiness of citizens. Common pain said all accumulation beyond what a mans own hands produce is derived to him by living in society. In the oath on every principle of justice apart to that. So the responsibility of tax pain comes from the fact that we are in the society indebted to one another. And the fact that we pay with those debts would pay our taxes is the reason we have the right to be represented by our government. The National Womens Rights Convention ask and now holds a vast amount of property. On what principle then do you deny her representation. That link between taxation and representation is not something other revolutionary war. It continues in our politics today. In 1959 africanamerican activists integrated the beaches in miami. They brought with them to the short they brought with them their property tax receipts. Because it showed that they have paid to maintain those beaches. It belonged to them like everyone else. It showed that they have paid their share. They have the have the receipts to prove it. They played an important part in the rhetoric. But it is also how average americans think about tax pain. For 40 years the ask whether they see it as a responsibility and for decades they have held pretty constant view of that. A Common Survey question is whether its every american civic duty to pay their fair share of taxes. About 5 disagree. I should put that in context. At about 6 of americans think that the moon landing was there. And these are views that americans are holding strongly. I was surprised and i would get these i remember a marine from california so when i say the word tax with you what does that make you think about. He said the cost of being an american. Hed paid in a much more concrete way another person i spoke to she was a democrat from florida. Ive been interviewing it because i want to write a book about american attitudes. She said i just want to remind everybody that no man is an island. Were all in this together. It wasnt just democrats are independents who said things like that. When ask him so how do you feel when youre filling out your income tax forms he said i feel like im doing my part. What is interesting as its not is its not that americans have the nice words to say theyre putting their money where their mouth is. Americans ever rule a remarkably committed tax payers. They pay their taxes honestly and on time. And economists think at rates higher than can be explained by our enforcement mechanisms. It is a social norm that we share if everyone else is chipping and i should do my part two. So even when actually comes to putting their money on the table americans are good at being taxpayers. So they see it as a civic response ability. Here is another surprising truth. They vote for tax increases. About the a half a seats have a mechanism in those the states over the last 15 years its pretty common to put a tax increase on the ballot. Voters are voting to raise their own taxes and its not just one kind of tax. They are raising sales taxes and progressive taxes. If americans see tax paid as a Civic Responsibility why is taxation such a controversy in this country. In short i think the answer is been crowned is not the same as being happy. Only 7 of people say the amount that they personally pay. Theyre not bothered very much by any taxes. Only 7 of people think thats the big problem. Either the wealthy or corporations not paying their share as their number one concern about taxes in this country. Another 4 of people say their worst concerned that poor people are paying their share. If we see tax pain is as a civic duty that we all share is something that is so important to who we are and being a contributor person of course were angry when we think some is not doing their part. It is not easy to know how much other people are paying in taxes for instance its pretty common that they have missed perception about the tax code. This was a statistic that suggested that its exactly right. About 47 percent of households either got back more money than the patent or ended up at zero. This is how it was remembered and repeated. And yet this false version have a pretty big impact a few years ago. People are misunderstood and how tax responsibilities are distributed. Its very common for people to believe that the immigrants are not paying their fair share of taxes. They represent longstanding stereotypes in as we all remember from things like the welfare queen. We know that they dont work in this country. Unfortunately that travels directly through to today. Who really pay taxes. The second part of my bucket talks a lot about the limits of our community. About the amount of taxes paid by the poor. Its where all of the tax money was going. Ill be happy to talk to all of those things. They often have misinformation about policy. It means that they are hard to take those. I want to leave you with a different question. If i wanted convince you. As patriotic and something we must all do. I want you to take a minute about why it is that we do not see those attitudes defecated here in our government in washington. Thank you. [applause]. I would like our panelists to come up. And join me. I just want to say things. I just want to read the first paragraph of vanessas book. Its only 182 while written pages. The first paragraph is as follows. When i tell people i study American Opinion about taxation the reactions are predictable. It usually passes across the face of my inter locket are. Second, he or she informs me that they hate taxes. Or they prefer to be self sufficient. For one reason or another they just do not want to pay the limits of bill. I also want to have special greetings from a Dear Colleague of ours who many years ago wanted to form an Organization Called willing taxpayers of america. When he heard about the event today. I will introduce heather and frank and then im going to ask a broad question to open to each of them to give them a chance to respond to vanessa and her book. The executive director and the chief economist. They focus on economic and quality. Specifically employment social policy. Her latest book is finding time. The economics of worklife conflict. She writes for the New York Times as a room for the debate feature. She previously served as chief economist for Hillary Clinton Transition Team as well as at the center for american progress. The center for economic and policy research and the policy institute. Frank is the executive director for tax fairness. He helped found the organization in 2012. The coalition of the 320 organizations prior to that he managed Healthcare Campaign for the Communications Union of america. In support of the Affordable Care act. He has also been senior policy advisor to the government. Here are a book edited keep hope alive a book about that campaign. Let me just start by asking a broad question. What you tell us a bit about what you learned from vanessas book as to what this tells us about an inequality in its relationship with taxation there was an important lesson he learned from vanessa and i cant wait for him to tell us what it is. When you start heather. Thank you for writing such a great book. I will just take would just take a moment to do one small brag on her which they have a grant giving opportunity. We could not be more excited that we were able to support this research that is so important for the questions around equitable growth. For me there were a couple things that were really were really striking in the book. The first was you talked a little bit in your marks that this idea that people feel that pain taxes is a civic duty. That they think that it should be fair and it definitely can be in qualitative work. This probably what makes the most sense in terms of air. The next step which i think is hard for folks to really connect the dots between is how the fairness of the tax system isnt just about the fairness of whether or not you are paying your fair share versus me but what it is that were paying for. And so one place i would like to take these ideas that you work on in your book how to make it for people and policymakers. We ended your remarks with this idea that misinformation means that its hard to connect policy is definitely more difficult to connect policy back to values. The way that our tax system is structured actually enhances and does not promote growth in a way that can have an effect on how people feel about whether or not the tax system is fair. Someone that we work with a lot is a manual acai is. With his coauthors they have done some research looking at whether or not there is room to increase taxes at the top of the Income Distribution which overtime we have seen the marginal tax rate at the very top of the tube about 70 in the 1960s to less than 40 at the very top. You see that rates are falling for families at the top. Yet theres economic evidence that there is a lot of room to actually increase rates that they not only promote fairness but economic growth. We been told a story that we need to keep taxes low at the top. The that increases investment in labor supply. The basic argument that we hear a lot up. At the same time. The tax rate at the top there are other factors. Is not just the labor supply question. Whether or not you are using labor income. And whether not actually change behavior. Is that the most important factor in having those. As it changes the incentives to have higher salaries. It creates a greater incentive they get to keep more of it. Now that is a comp located little story there to figure how to connect the dots between that sense of fairness in terms of that we want the tax system. Its only fair but its doing right by their community and the way and that we been talking about taxes especially at the top it sometime about fairness but its also about growth. How do we work to change that. How do we work to change that. Im so glad you focus focused on that. Im tired of the argument we have. I dont know where they get there. I will ask couple of questions. Im good to ask about a certain skepticism that i have a hunch exists in the world of Political Consultants about your thesis. For the last five years when we create to determine our name in the name of our organization we did a whole bunch of focus groups as we started out. What came through a lot of clear was what the public about that it was grossly unfair. Prior to Elizabeth Warren running martin running for president. Everybody felt like the system was rigged. When she was running from senate. We remember that first speech. The room was packed and she was talking about the rigged system. We put in front of the focus group. And tested out the feeling about the unfairness of the system pervades the culture. Its on both sides. Its White Bernie Sanders does well. From our point of view i think its very profound and helpful i think the obvious findings was a little bit shocking to me only because i have not done that. When text a comes around every year. It was part of a tax march. We will actually well actually writing principles for the tax march. I get into the whole thing of mine around civic duty. At the time of year is a common good. But it is a language that i have not been using. We have not used it in our advocacy worked. The reason it was important to hear this for me was because it is a place of Common Ground i think between people of different ideologies. So much of the text the bait is about the role of government. And what is your relationship to the government. What you think the government ought to be doing for you for communities. But then a in a lightbulb change for me if we do have that kind of Common Ground it says a lot about how far we got away from that place and how this used to be united around the Common Ground whether you are democrat or republican. They have the tierney of theology on taxes and government. And we cant get through that to get to that place of Common Ground that you found is where the public is. Its our Education Program in our work to remind people that we are in this together. Because of what it means for us. We need to do more of that. I want to thank you for writing this book for another reason. It was falling on april 15 and i couldnt resist writing a column under that headline. On april 15. If you support our men and women in uniform you have to support the men and women of the irs. Hes really on them. Two questions the question and that we talked about. He said about half the time tax increases when and have the time they lose. In what circumstances do they stand to win. Is it random. Theres probably some particular aspect. Youre not old enough to remember but i am that Walter Mondale promised to raise taxes. I know very few Political Consultants who suggest who their candidates that they go on tell voters im going to raise your taxes. What is wrong with that analysis in light of your finance i think that is such an important question. On the question of when they vote for tax increase. Elections happen overtime. Its hard to unpack this. The tax increases do that. It seems very straightforward. Arizona pay more to get nothing extra. They would prefer to understand where the money thats been raised is good to go. When they are funding things that people really like. They are things that are most popular. Of course public safety. These are all issues that people think that patrons should pay for. That is a real take away in terms of when they do well. We make sure they know what theyre getting in return. Its actually related to the first. I told you about how tax measures have been doing the last 15 years. That is a striking change from the era of people like montel. It has been a very steady increase over time. About one in five tax to the ballot box. Its been very up and down. What has changed is a success rate. The probably doing a better job of what thats can pay for. We are trapped by a political moment that happened there. We remember this era and the proposition 13 and that kept it with property taxes in the state. It continues to win on what they have done today. Because its a very salient memory from the 1970s i think people sometimes forget given the fact that we got from one in five to one and two of these measures. It might be the case that we need to reexamine what tax attitudes are. And that is the advent of the reagan revolution. See mike one Empirical Research sort of related in midterm elections we documented as much as we could add that was run in the congressional races what we found was shocking to me they usually think about he wants to be the big taxi spenders. It represents where the public is on the system. Especially an off shoring issue. They are shipping jobs in shipping the profits offshore. They feel very deeply about that. That was the first time i saw where democrats were running full speed ahead. Always criticize. They have their hands tied behind their back. They have a lot of them to have the taxing corporations. Both parties were in the game. Think we cant quite achieve of the policy changes. I dont believe there is a link. I just wanted to point out what the result was. I was just can add to that that that debate is made even more, get it of course because middleclass families had have a raise in so long. When you see this growing disconnect between productivity and wages and incomes. We very quickly we set us in the early 2000s have a lot of what im watching for the spring. With the sheen of the small tax cut. On top of a very large tax cut those at the top. For them to not acknowledge the very real struggles that the middle class is having. It makes it a little bit hard for those who say we want to have a more progressive tax system. Its based on real struggling families. Do i explore it a little bit. What i wanted to ask explore that and what do we learn from vanessas book what we learn for this coming fight. We are spending a lot of time talking to folks in our legislative at the sea work. And whether it should be a big feature here or not. They will do that despite the fact that half of trumps plan gives a 6 trillion in tax breaks. Half of them go to the top 1 . I know you want to believe it. 99. 6 percent of the benefit or tax breaks go to the top 1 . The democrats there are two challenges with that. It really goes to heathers point. They havent felt like theyve have a raise. If youre making 50,000 a year and its trumps plan to get an extra dollar per day. A beginner gets millionaire gets a Million Dollars extra per year. What can you buy for a dollar a day. We have a revenue gap in this country. We contact economics for a minute think of a flat line. Revenue as a of the gross domestic product. That is a five percentage point gap now you can do what republicans want to do does not had any Economic Security where you could do what my organization advocates to raise revenue to significantly close that gap. Thats what we need to do. If your advocate for middleclass tax cuts its getting grow. To make i think but they teaches i think what the book teaches us is that theres room to make those arguments. What we dont need is another middleclass tax cut. There is places we can take that from. It certainly does not start by giving massive tax cuts. We need to make these investments in the united states. One is that we narrowed the investments down. They understand when the bridges fall down and there is money needed to fix them. A second bucket of issues that we dont talk about enough. They have a Social Security beneficiaries are up in age of getting that those are expenses that are going to be borne by someone. Theres two ways to do that. You will have socialized over a lifetime and over all of the American People so that its been paid out of the fund. Its gonna follow directly on families which is can have this very negative impact on families ability to be full participants. If you have to have an aging loved one move into your home we arty know that this has affected the Labor Force Participation rates of American Workers in their 50s and 60s at their time when i need to be working and saving for retirement. It makes the budget even tighter. All of it will drag down economic growth. We are not making the kind of investments that will make us a vibrant 21st century economy. I think what i take from your book as we need to be doing a lot more to make this tradeoff really concrete. We need to raise taxes. This is why we need to have the rules of the game because if we are using our tax dollars to make capitalism work better than the people that are benefiting most from the Economic System should actually be putting a lot of skin in the game because they are the ones that are can benefit the most. I think we need to change that conversation. I do think we start focusing on how we are going to create jobs. I just want to say i knew heather was extraordinary. You are the first guilty economists. One is just to respond to what has been so far. I think for a lot of us certainly for me everything you say about the need to contribute to common life that we are all in this together. The tom payne idea that the individual success is a lot to the society in which we look at live in the has beautiful is beautiful language. I think it resonates. It comes to taxes the word that gets used as government. When you look at that. There are a lot of surveys that show declining faith in government and how Government Works. Some of that is the result a result you can argue with. Some of it is a sense that things arent working well for a lot of people in government as a Natural Force to be blamed. It does create a challenge for this argument even though clearly your own research said people do think of taxes as paint for our common life. Respond to what has been said if you could sort of take that went on also. In my mind the argument that i think people want to make is that we should be able to recognize that a tax cut results in a shortage of services. We didnt have the dollars we needed to fill in that pothole. You have to be able to make that case. Our schools and our hospitals in our hearts get could be better. If we put in the cash. I think the challenge in making that case have a very deep concern about government waste. If you ask americans what percentage of every federal tax dollars do is wasted the average answer is about 50 . Maybe 7 of the budget. What a terrible disconnect between what experts know and average people believe. Thats how we normally talk about public attitude. Actually here very different story. First of all theyre talking about entire programs they dont like. Efficiency. We talk about the bureaucracy. They talk about government operating on behalf of the very wealthy and corporations. And they are completely unlike average americans. They dont live like me. A problem we face is that people dont trust the system by which we allocate the dollars. And when they have these profound doubts about not just outcome the process itself. I think that creates the big challenge in convincing people that there is a tradeoff. How much does it matter that theres one more little tax cut. Also having faith and voting there can get you the government you should have. It also undercuts that. Its a very foundational problem we have. The little nuggets in the book is that people a lot of people are very supportive of a flat tax. They are the same folks who are animated by the tax fairness issue. Then understand what they think is that the loopholes are so bad if we could get a minimum tax that they have to pay than they would be better off. And then in society would be better off. The selection displayed that greatly. Until we get that. Its the flipside. Weve one party thats really tearing government done a lot. Thats been done. I think the latent feelings about the public. The disposition is there. It is a lack of trust is not able to be bridged. If both parties were saying we have to raise the gas tax in order to rebuild roads and bridges and forts and rail Freight Systems across the country. That is not the dynamic we are in. First of all the specific question is that it came up a little bit before. It varies so much by state. It makes it very hard for people to make a reasonable transportation i think that is in isnt exactly a good example for that reason. How do you make people believe that their democracy can function when they have very obvious ways. One of the favorite parts of the book is on page 14. The fraction passing over time. They had been more likely to pass over time. In one of those known there. One of the things that i think this conversation get that for me. It seemed to me that people really value things that they could feel in touch. It would push it to having more of these conversations. Is that what we usually talk about here in washington dc. It seems like where people are raising taxes where having this conversation here in washington. Based basin all the folks that you talk to is a good reading of your book. First of all, they think their local school is great. On the one hand its deftly true of course of course they can have a bigger say. Its mathematically true if nothing else. At the same time he faced the challenges that challenge that we had sorted ourselves politically you hit up against a problem of building your little enclave. That is a more general challenge that i alluded to at the end of my talk. We dont talk as much about civic duty. With the oldfashioned style of talking about our political life. Everyone had to come up with their own language. They have heard a lot. They dont want taxes and to punish her work. It has really captured an important sentiment. They all have the same words. Just as many people talk to me about the fact the idea of community its a way to show that im responsible to the community. We all had different ways to talk about it. They all have a fall back to fall back on whatever metaphors they could put together to describe what i could in the book. Its not common in our policies now to get people in the language they dont have a shared language to express that. If youre saying it sparks something in me. We have microphones going around the room and i want to invite your friend to ask a question also. John f. Kennedy said that in 1961. That was the high point of the greatest generation if followed a time when actually believed the government have helped end the depression. There was a public consequence that we had been losing starting around 1968 or 70 whatever you want to date that. I think we can see part of it is how do we get that back. We dont have a world war. And thats the way to do it. Maybe that was just a very unusual time. I think it was a civic sense where people felt a stake in common endeavor. They thought it was in their interest. I think one of the challenges of course is that the early 70s was also the low point of inequality in the united states. In many of the reasons why they lost the faith and trust in government and thats a lot of it. It was also a large swaths of our society. Racial justice movements. Its higher than what its ever been in the united states. The massive pulling apart and i think what you do see is people congeal around the fact that thats a problem. All sides of the political election. In many of the voters were frustrated that somebody is growing. Now we have the flipside of that coming together. It is the frustration that is our challenge today is to figure out how you can take the negative of inequality and make that into something that we have a common purpose around. I think our hope rises with the electorate. They have a very diverse population. Young folks and people who i think of have a different attitude about government than the current dominant cohort that is out there. Its can going to be the biggest voting block. They have a much greater Comfort Level with government. They are much more communally oriented. Much more engaged through the world i should say. They are comfortable with government spending. A lot of them are still working with their parents. Have a couple of kids coming up in college. That is my hope. With the quantitative work youve done youve teased that out or not. I think its a really critical question. I think that im hesitant to feel confident about demographic destiny just because i know americas Political Institutions has been structured historically into the stay to limit the power and it was a part of the plan. It continues to have the effect in the last election. I would be hesitant to put my confidence and simply having the most potential voters because i think thats quite clear that a number of states they are willing to change who they vote. Alongside that i think on the broader question of how to create this sense of shared fate that is what that generation had. At the end of the day. We have to defeat the nazis. And something we all had to do together. They can just cannot just buy their way into life. I have my own take on this. And Something Like a world war that we face. I know that sounds a little bit like im never get to do that. You know what Climate Change is doing causing droughts in rural america. Every farmer notices that. Its flooding our rivers and our coasts and the danger to cities and rural people. Undoubtedly most dangerously to the poor but they let us all know that new york is one city. I think that looking forward we can identify that as a shared grace. They could be. Something like a world war ii level commitment. Now i have to my true level of optimism. Maybe we should just start a cable channel that shows nothing but 1940 movies. Weave a bunch of hands up. This is great. Lets start in the back. Im jumping onto my out of my seat im so excited about this conversation. I had been working with your colleagues on this notion of new american devotion is him. First time around some ten, 15 years ago they got right around half the vote and passed. This time they have these accountability structures in place. People trust them like you talked about, and they are winning between 7682 . And the property tax in the florida voters, right . So question, children are very popular. You talk about children in your book and any advice for me as i kick off this new project . Thank you for a great question. I should attack and more about that actually. It is one of those the things that does croswell kind of device. The frequency with which people think our children. They dont even have kids who live in the house. That i think is an amazing commitment. You see that in the commitment of people without children to Public Education and being willing, after we need to look after children pick it is a point of commonality. Dojo defeated bond issues in places where you have basically older population who have kids are not in schools anymore . So it works both ways. It doesnt always as i say, my positive statistic is a 5050 shot. I love the line, original sin is the only empirically verifiable doctrine as a christian church. Its always important to talk about human frailty. Thank you. Thank you. Rick with just economics. Was very interested, among everything effort from all panelists, learned a lot, very interested in the remarks about peoples perception of textured is relating to, whats the relationship between what i pay and what i get . I wonder if our tax mechanisms dont plan to that . What it means is we tend to rely a lot on general taxes, for example, sales taxes. The nice thing that politicians love about sales tax is you can raise a buyer infinitesimally small percentage and rake in lots of mu law that i can spend hither and john. But people of no consequence how that money gets spent. I think in particular when it comes to water and sewer most of the pay per gallon fee for the water we drink or the toilets with lush and it seems kind of fair that the more you drink or the more you flush the more you pay. We could pay for water and sewer with a sales tax but if we did with people at any incentive to conserve water . When they see a leaky faucet today they see the water going down the drain. But if we pay for with a sales tax, with a go out and buy something they did need just to compensate the Water Authority for what theyre wasting . Probably not. Im wondering if theres maybe a lesson for politicians that if you want the public to understand and support taxes, we have to create some better linkages between what people are spending and what people are getting, and that would mean maybe moving away from general taxes towards maybe things like user fees and Value Capture where people pay sort of in proportion to what they get. Thats a good question. I forgot wh who wrote budding democracy journal with which i have an association, a good piece on this one i get a tax receipts and when refund also ought to get an accounting like a onepage accounting, hereby the wait is what your tax money went to. This is what it is spent on. Im not sure it would revolutionize everything but would be a very useful piece of education so that people get where it is distributed. Im curious, the use of the question is an entirely different question that it is related to the issue of knowledge. I think they were basically two questions. One is a question of making benefits visible, and that clearly is an important thing for government to do. There are many ways that can be done. With a tax receipt, at a federal level tax receipt shows mixed success. Where it is really successful is on Social Security. Some point may receive a green statement about your own solstice could benefits. It had a measurable, they did that as a randomized trial, just be able to say, so you can actually measure the impact of people find out, heres a much you paid into Social Security, heres what your benefits will look like and if you keep paying him like this, this is what will happen. It not only increase peoples knowledge, it increase their confidence and Social Security. So a lot of misinformation about whats happening with Social Security. To the extent we can make the benefits of government visible, thats important. One, because would be good for people to know a benefit to receiving so they can judge of those but also because people are not just consumers, they are citizens. Go back to the polls and say whether congress to a good job. It needs to be obvious to them. When did you social policies in the tax code which we do a lot of in this country we often lose that connection. Thats a crucial issue. The second point about feeforservice basically of benefits principle. I think we can disentangle those. Many places where feeforservice is a good idea, the gas tax operate in that, particularly for things we like to do less of it. But at the same time i think having every tax dedicated to particular purpose first of all that ends up pretty regressive. Falls very heavily on low income people and secondly, it doesnt create a place for our democracy make those decisions. At the end of the day thats what we would like you would like to build to trust our democracy to allocate money from a general pool. I would prefer that fundamentally then believing we had to have each and every service paid for simply because we couldnt trust any lawmakers to make those judgments. I think there are two issues going on, both of which are really important. Theres a lesson in you, and whoever wants to come in, the united way answered big philanthropy declining as people give more money to very particular things that they want. My understanding is one of the net effects is less money in sept going across town from richer to poor parts of town and that you need some general fund that is not user fee based in order to achieve sort of a love of social decency and parts of town that dont have a lot of money to spend. It goes with the rest of this but i think its a larger part of the story. Did you guys want to come in . I want to come in to the side of the room and then want to get some of the voices on the side. I want to comment on the question that you just raised about people knowing what benefits, the benefits they receiving. This is one question i feel like is that social cytosine to understand but policymakers dont. Or that is the my own personal experience is i found it difficult to explain to folks doing policy why that really matters. Or found a lot of pushback on that site is one typical of it all the plea that anybody in the room or listening or watching on television thinks of evidence for that, thats something we talk about a little more, because i think too often theres both how to do something really efficiently, which may not gel well with showing people the benefits theyre getting, but theres also sometimes pressured to do things to employers or hide them in the tax code which really doesnt secure that for people. It a leaky with programs that people dont understand. It would be nice as were having this tax rate over the next few months there were more voices rising up and having accomplished alongside about how important it is for people to see what tax dollars are going. So just a little plug for all of you thinkers and doers out the there. I think a good think tank could do good work on that. My quick, is i think it would lead to much more balkanization of our politics and we have now and thats the absolute wrong direction to go. Lastly, the taxi taxes is help e the wealth. I will use the redistribution word. It is to redistribute wealth. If we got into this taxes for that, the folks are going to lose the folks are most in need. Unless we do the wealth tax. Yes, to redistribute wealth, okay. You could have a user fee on wealth. [inaudible] [inaudible] thank you. Sounds like henry george. I have a question about the Public Perception of fairness and when people talking about fairness, is it a notion that the system is good but its been hollowed out, or that the system itself is not working . In other words, is 39. 6 , 35 corporations, are those their top marginal rate but we dont like the ability to hire advisors and lobbyists to lower your effective tax rate . Or is there some deeper value that people are responding to that they think no, 50 is a good rate . Income taxes unfair or something more fundamental. Thats a great question. There are several parts of it i want to talk about all at once. First of all as a general rule, americans support progressive taxation, and you can ask the question giveaways. You can as good as percentages or daughters and you get progressive result either way. You can shift the results, to get a lot of polls try to push one way or the other but overall american supported progressive tax rate. Theres some serious gaps in peoples policy knowledge. Why needs you use the phrase marginal tax rate. That is an entirely nebulous idea in the Public Comment understand that people didnt understand the next tax rate applies onto income above the income you earn on the rate below. People imagine youre paying 39 or that one time taxes at 90 at the very top a think thats 90 on whole income. Thats a very common misunderstanding that undercuts support for high tax rates because thats how it is perceived. One thing would be interesting is to find a way to explain that quickly. I tried that in my book but thats a policy problem in terms of explaining how income taxes actually works. It is commonly believed in front of this point already that people like a graduate income tax in principle they think which people should pay a larger percentage, not just a larger amount, but they also commonly believe that our Current System is undermined by loopholes. So thats what results from that is a willingness to trade lower rates for closing the loopholes without a clue on what most of those do which is lower revenue. They think you close of few loopholes that we will have all money and is not going to be a problem if it lowered the rate. On the corporate side that is closer to accurate than on the individual side, but yes, thats a common sort of misperception. A flat tax sounds like equal commitment from the citizens and we talking about taxing something that sits in stupid wouldnt it be great if that burden can be shared equally . Thats one motivator. Flat tax. If you asked them to talk about it they talk themselves out of it after minute or two but thats an emotional impetus of a flat tax. Secondly, this question a flat flat tax with no loopholes and those guys are not paying any of the safety rate you talking about, those guys will end up having to pay. Maybe well come out ahead. I think thats largely how that is understood. People have a lot more confidence about broad symbolic ideas like the rich should pay more than what the numbers should be. I think another example of that is a question of offshore, people feel very strongly about money being hidden overseas because it resonates with the single is a tax thinking something that is patriotic to do. The fact they are literally hiding the money outside the country, that makes perfect sense. Those are the kinds of policies that stick with people because they fit with emotional understanding of it. When you go to down when you go too far down the road, you have to provide information that is almost possible, you are not getting their pain in the wild. Youre getting their opinion with a certain set of the facts which provides pretty core fax. A followup, i seem to recall, maybe im crazy but when we got, used to be we would get these newsprint tax forms in the mail like with all of the forms that you would then fill out, i dont get those anymore but i thought in those they had a pie chart of our tax dollars went. Also my other comment is if you had this big pamphlet and it had all those tax tables in the back, i think it made it much easier to understand okay, thats how i learned what tax rates meant. I thought the whole thing with some interesting. I may be an outlier but im just pointing out just in a small way that was a way to educate people that we dont do anymore, so is it people are getting that information and maybe there are other ways we could be doing that. How much time do we have left . I forgot to bring ten minutes. Let me bring in a couple of people at a time. The gentleman in the back there has been waving his hand. Add a note or a couple of people farther up to let me take care of the side on this round. So you start and then i will bring the mic up here. Ill be quick. How do people feel about using the tax code to sort of behavioral engineer, encouraging certain behaviors, discouraging others . Great question. Im a little disappointed we do not have Grover Norquist on the stage in a bathtub. Funny you ask because im trying to get, set up an event with grover. I want, im the same. [laughing] grover, if you are watching make sure you bring the bathtub. Great prop. I just want to say i think a lot of what vanessa is talking about is narrative. I dont think that we have created a narrative about taxation that people can understand and gravitate to. The narrative that weve got now is all topsyturvy, for three or four years weve been told, the narrative has sunk in, that if we give people at the top the money, that we are all going to benefit at the bottom. The only thing that is trickle down quite frankly is misery. For example, i dont think most people know this, but Companies Like walmart and mcdonalds actually have seminars to tell the people look, if you cant make it on the salary that were paying you come here some Government Programs you can go to. The waltons are worth 40 billion. Were subsidizing their employees. We are subsidizing their wealth with our tax dollars. If thats not insulting and if that doesnt get peoples higher up, then theres no hope for this country. Thank you. I forgot who just proposed a tag specifically on companies that sort of disproportional use government benefits to subsidize wages or benefits. The gentleman right behind there. Just a quick question, comment. The discussion of fairness has been around, mention the poor, taxes, loopholes, shelters, their share. Has there been any consideration or any research, anything come up about tax simplification . Equal treatment before the law such as, for example, getting rid of all exemptions, credits, deductions, special treatments in the tax system. Treating, for example, all income as income regardless of its source or i only say this because a look at the tax form every year, and if you did that for me, my taxes would be paid on a postcard. Because the irs knows all my sources of income. They know the rate that im supposed to owe and, you know, and that would actually impact a huge majority of people in this country who pay wages and have their taxes withheld. Thats a book and question the question of the gentleman in the back which is not using the tax code to accomplish one other idea, president obama talk about this in his campaign and none of the tax preparing firms like that, which is bad in fact, most people pay on a short form and you could actually send people a bill on their taxes where they would not to fill out anything. On this tax implication. The people who complain on the people who get the most damn benefits out of the tax system. And for all those things werent there, they would pay in many cases higher taxes. Its a very odd, i think simplification is harder than it looks. But anyway all three of these questions are good. If you look at the reasons, the messaging, talk about nerdy, the messaging that paul ryan used on the blueprint was, they always led with simplification. Now talked about getting loopholes, making the system fair by getting rid of loopholes so they sort of coopted our language on that. The simplification can appeal to everybody but fundamentally it is who uses all the loopholes. It folks at the top. I think with half of a narrative that is successful, and thats the tax fairness nerdy. I think we have trouble on the other half of the narrative which is what do you want to do with that money, what we need to do, how do we need to make america better, whats the role of government . Thats when things fall apart for us. Thats what things are more challenging, because of all the stuff people are hearing about government, you know, and on the left and on the right about how the system is rigged, its really working on behalf of the rich and corporations or its working on behalf of big unions. So its that problem. Thats going to have to shake itself out. As they say, when the pendulum swings back, swings to the more liberal progressive sides of thing i think that will shake out. What about using the tax code to get things done . I think that has, i think heather talked about this already. The more complicated you make the tax code even if there are benefits to working people, benefit you like his people have for Child Tax Credit or things like that, the more complicated you make the tax code, it makes it hard for people to see what government is doing and he convinces of them the taxes are colocated or if taxes are competent i know whos getting the real deal, the people of that fancy accounts and the lawyers, not me. The complaints about simplification are in an interview setting, in a survey people will check the boxes but an interview setting it is almost impossible to do something. People go from complaining about the complexity of type their own taxes to the certainty that people were not paying their fair share. They are imagining i to sit there and remember my little deduction here and there, earned income tax credit, college, all these things. Every time you think that of remembering those things the related that someone fancy with them them with a better account is getting bigger deduction. It creates the loopholes. People are experiential learners and the taxing process is a time whenever what government does victor lessens your learning are leading them to some really long edges but our tax policy works but i guess our Government Works more broadly. We need to think about that when you are constructing the systems. And trust, nudge people here and there, it would be nice to respect them and give them the information they need to make decisions as citizens. Theres an irony because you take with you homeowner deduction, every homeowner will be serious. If you take away the state and local tax deduction, everybody in high tax states will be serious. So with the eyes of the payer. I cant resist putting on the spot. One of my favorite pollsters and old friend is in the audience. And then one last question before the close after a guy. Vanessa, you talked about sort of the positive values associate with identifying ones self as a taxpayer. A lot of the policy fights that frank and other groups will be involved in will be dealing with the reverse scenario, that is, kind to stop efforts to give new Tax Advantages and breaks to corporations or highincome individuals im wondering anything your part in your interviews would give guidance on the kind of language to describe companies are wealthy individuals who attempt to reduce their tax burden or avoid the Tax Obligations and highly, what is of the negative language, the sort of reverse civic virtue . Thats a great question. I think there is some really great Political Science work done on a peopl a people undersr misunderstood the bush tax cuts, which i would have recommended read for anyone who wants to think about what the politics are likely to be this time. One challenge is tax poses very hard and people are very busy, and so many people are trying to mislead them about how taxes work. Its not that surprising at the end of the smart educated people have wrong ideas about how tax policy works. Thats a big challenge. Words like simplification some good. Closing loopholes sounds good. Its not easy for people to get a clear answer about the need for the overall budget or for people to draw the connection between the tax code over here and the services that dont exist in my community over there. Those are real challenges. But at the same time part of this to me is just about having the courage to talk about taxation. I think often people dont have the courage to talk about taxation by everything we should have a democratic form of government, taxes are how we pay for it. It is in a democracy are shared investment in our government. I think having the confidence, the courage of your conviction about why we raise money in the first place and what that is supposed to be doing, equity it is creating, the services it is supposed to be paying for is, i think people can tell when you dont believe what you are saying. So to me rather than, i dont think its a fine a perfect set of words to say it i think its about the honest with yourself when you say it. So yes, i think on the particular fight in the next few weeks, i would expect that the overseas question is one that will present with people and thats on the right and the left. Left. The idea that comes to me, took their jobs overseas and other want to keep the money overseas, too, that is offensive to people who are paying their taxes and cant hide the money in the Cayman Islands or wherever else people imagine where the money is hiding. So i think, it also resonates with a larger idea that tax thing is something that citizens to support their community and the country. If you are not doing that it implies that you dont share our values, that youre not doing the patriotic thing. I think thats something that is both true and resonates pretty easily with people. Let me ask, will any taxpayer youlfeel excluded at the end on time . If theres an urgent question ill let you ask it and it will close. Go ahead. You probably put her hand down so i will reward you for that. Thank you to you talked about how taxpayer or americans kind of like self attribute the taxpayer liabl label to the celd now that a shorthand for like an upstanding citizen. Weve seen especially in this last election kind of backlash against people who they dont kind of label as a taxpayer, even though the evidence is exactly contrary to that, that undocumented people pay more in taxes than the receiving benefits. Its like theyre almost a good to the fact completely. What would you say, what would you attribute to this kind of change and i guess whats the future of that . Do think it will be improved or get worse . I think that is one of the most fundamental questions we face, not just on taxation but just in general. And thank you so much for asking it. You are exactly right that americans commonly believed that undocumented immigrants are not paying their share in taxes but at the end of the day undocumented immigrants are doing the yellow tour to prop up Social Security and medicaid for which they are not qualified to receive. They of course are all low income people they disproportionately in sales and huge taxes, and you dont have this annoying process want you to think about them. Thats exactly right and thats a misunderstanding. I dont know anything it would be very hard to find out whether, i dont think just telling people the facts when they are responding to an emotional reality for them. They are responding to an event that predict information about how the text of quarter im not sure coming back with facts about how the health of our selfless criticism is way to change those mines. I think in this case were missing is that our understanding of tax policy is a mere for the divisions in our society. And those divisions are pretty fundamental and weve had for long time. It was his idea of the welfare, this is the benefits and as a pain. That was a racialized id. I think seeing a similar type of rhetoric about different ethnicity now within document workers who are not paying taxes. I think that is a deep divide in this country. And i think that, you know, i would like to say that providing better information about tax policy was going to bridge that divide. Instead what you think is why dont we bridge the divide, we have crossed i think fundamental challenge that we face which is building a fair economy with a multiethnic community. Thank you. [applause] i want to close, one of the nice things, vanessa, im not a social scientist these interviews and people wonder is it fair accounting of all the species that she has an appendix where she sort of summarizes all of her interviewees and want to give patsy the last word. Patty is a 58yearold registered nurse from sacramento, california, and here is what vanessa vote. Asked if it is ethical to find legal ways to avoid paying much in taxes, patty says hell no, its not. Pardon my language. She says keep everything going as it should so that we can continue to have lost about and have people following diseases and immunizations for our kids. Otherwise, we would be screwed. Thank you very, very much, vanessa and frank and heather. [applause] [inaudible conversations]
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