Parajuli: Tax Them to the Polls

by Abhishek Parajuli | 11/9/14 7:39pm

Four out of five young people did not vote in Tuesday’s election. In fact, the U.S. Election Project estimates that this year’s midterm saw the lowest overall turnout since 1942, as reported by the New York Times. Should this worry you? It should if you care about democracy. A torrent of recent studies show America’s democracy in crisis: In his 2012 book “Affluence and Influence,” Princeton University’s Martin Gilens found that lawmakers only respond to the policy preferences of the rich, while the middle and lower classes are basically ignored. Larry Bartels, Benjamin Page and Jason Seawright later added that real policy influence might in fact rest with “the one percent.” Increasing electoral turnout via a universal poll tax will reinvigorate democracy.

Competitive elections get lawmakers listening. This seems pretty self-evident, but what Gilens found is astounding: Competitive elections are the only time that policy makers care about what the middle and lower classes want. At all other points, spanning 1964-2006, lawmakers responded to the rich and ignored the poor. If competition is so crucial, how can we foster it? Increasing turnout is one solution.

A proportional universal poll tax, with a receipt-reminder mailed out a week before an election, would dramatically increase turnout. All eligible voters would pay the tax. The idea is to make them feel that they have “purchased” the right to vote. While the 24th Amendment bans poll taxes, since previous taxes acted as barriers to minority participation, this tax would be akin to Social Security contributions: deducted at the source from everyone, with the funds used for a public good like a public campaign finance option. A psychological theory called the endowment effect supports its implementation. In a 1990 study, researchers gave students money and made them bid on some mugs. Once the students had bought the mugs, they were asked to sell them back. Surprisingly, the price students demanded for the same mugs once they owned them was twice as high as the amount they were originally willing to pay. Other researchers have found that people may value a commodity they own up to 14 times more than an identical item they do not own. In sum, what is ours is more valuable than what is not. This insight has important implications for increasing government accountability.

Development economists have long wondered if people in countries reliant on foreign aid hold their leaders to a lower standard because the money is not “theirs.” An experiment by Yale’s Lucy Martin supports this hunch: She formed two groups of participants and gave the “leaders” money to share with “followers.” Group A was told that the money came from taxes, while Group B was told it came from a “grant.” Followers could punish the leaders if they felt the amount they received was unfair. Group B participants, who believed the money was from taxes, were 30 percent more likely to punish the leader. A 2011 field experiment in Indonesia also found that provinces that relied more on tax income versus central government funds had citizens who were more politically aware, a prerequisite to demanding accountability. It seems then, that taxes do increase citizen demands for accountability. To see if this is true in the U.S., I checked if corruption in different states varies based on effective tax rates. Controlling for differences in per capita income, I found that states with higher state and local taxes have lower levels of corruption. One possible explanation for this is that these states’ citizens care about, demand and receive a more accountable government simply because they pay more for it.

Too many political scientists focus on the wrong question. Why, they ask, are representatives less responsive to the poor and middle classes? My prescription of a universal poll tax deals with demand; the tax will increase citizen demands for accountability, especially within the middle and lower classes. If citizens are more engaged, lawmakers will face the hard choice of supplying attention or facing eviction. Demand creates its own supply; political responsiveness will increase when citizens are more aware and demanding.