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    Home»Personal Finance»Budgeting»Outrage Grows as Study Highlights Wealthy Tax Avoidance, Yet Few Taxpayers Imitate
    Budgeting

    Outrage Grows as Study Highlights Wealthy Tax Avoidance, Yet Few Taxpayers Imitate

    Money MechanicsBy Money MechanicsSeptember 20, 2025No Comments4 Mins Read
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    Outrage Grows as Study Highlights Wealthy Tax Avoidance, Yet Few Taxpayers Imitate
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    Key Takeaways

    • While 70% of Americans, according to Gallup, say the wealthy pay too little, that doesn’t mean they’ll take advantage of tax loopholes themselves.
    • Making it easier for regular people to use tax-saving strategies would help level the playing field.
    • You’re more likely to copy your neighbor’s tax strategy than that of a billionaire, as tax-saving behaviors tend to spread through close social circles, rather than through news headlines about the 1%.

    A 2025 Gallup poll found that 50% of Americans say their income tax rate is unfair, with 70% saying that corporations pay too little and 58% claiming that higher-income earners do not pay enough. Yet, while the percentage of Americans finding their taxes fair has dropped significantly from over 60% two decades ago, they’re not adopting the tax avoidance strategies of the wealthy, even when they learn exactly how the rich are reducing what they owe Uncle Sam, a new working paper from the National Bureau of Economic Research (NBER) argues.

    What the Research Shows 

    Researchers from the NBER conducted a field experiment examining property-tax appeals, a legal method commonly used by higher-income households to lower their tax bills. When people were told how often the richest 1% appealed their property tax assessment, they were more likely to say that the system was unfair, but that didn’t change their own behavior. However, if people were given a simple estimate of the dollars at stake, they were more likely to file an appeal.

    These findings align with other peer-reviewed research, which suggests that expected savings and “filing frictions” (the time, knowledge, and hassle involved) are crucial in determining whether households protest their taxes. In other words, convenience matters a lot more than outrage.

    Important

    Another NBER study recently found that from 2018 through 2020, the richest 400 Americans paid an effective tax rate of 23.8% and the top 100 paid just 22%. Meanwhile, the average tax rate for the U.S. population was 30%.

    Why Moral Outrage Doesn’t Become Mass Imitation 

    Researchers have found that a behavior spreads most when people see their family and friends doing something that appears both easy and rewarding. For example, prior research demonstrates that tax-avoidance strategies tend to circulate primarily within family units and close-knit peer networks. But simply focusing attention on the wealthiest of households—who are often distant and atypical reference points in people’s lives—doesn’t create imitators. Without learning how to do it from others they know well, most taxpayers just go along with the status quo.

    A values gap is also at play. The Gallup poll shows that Americans are more outraged out of a sense of fairness than out of concern for what they might do themselves. These views can certainly suggest widespread outrage over what the wealthy pay in taxes, but that doesn’t necessarily prompt individual action, the NBER researchers found.

    The Policy Angle: Fairness Narratives vs. Friction Reduction 

    Stories about tax unfairness and elite behavior can help shape broad social perceptions, but people are unlikely to act unless the tax reduction strategies are made easier, the NBER research and other studies have found. Providing simpler forms and clearer calculators, as well as free or low-cost advice, could significantly increase participation rates more than moral signaling.

    Importantly, differing property-tax appeal processes and the quality of local assessments can create their own inequities. When only well-resourced property owners with professional help successfully appeal their assessments, the system tilts even further in their favor. The solution isn’t likely to come from more outrage—it’s making these money-saving strategies easier for everyone.

    Important

    A Yale Budget Lab analysis found that 95% of U.S. filers earning more than $578,000 pay below their statutory rate, versus 25% of those earning less than $11,000.

    The Bottom Line 

    Americans may be furious about wealthy tax avoidance but won’t copy it themselves, even when handed the playbook, new research finds. Instead, individuals act when they’re close with those “in the know” and see clearly how they can save without a big hassle.



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