Statistics and stereotypes: The taxed and the taxed-not

Abstract

In the past decade, libertarians, free-market think tanks, and conservative media and politicians in English-speaking countries (Romney, 2012; Ryan, 2010; Morrison, Staying the course – strengthening our resilience in uncertain economic times, 2016) have increasingly argued that a growing share of the population is receiving more in benefits than they pay in taxes and is “voting for a living”. This presentation of a class conflict between “tax producers” and “tax consumers” is related to public choice theories (MacLean, Democracy in chains: The Deep history of the Radical Right's Stealth Plan for America, Scribe, 2017) and has also been argued in Sweden (Lindbeck, Journal of Public Economics, 1983, 28(3), 309; American Economic Review, 1985, 85(2), 9; American Economic Association, 1997, 35(3), 1273). Statistics on the share of the taxed and the “taxed-not” are used to argue that tax systems are too progressive and that welfare states have become overgenerous and unsustainable. This article analyses the creation, interpretation and development of measures used to estimate the number of the taxed and the taxed-nots. The article shows that the share of households who receive more in benefits than they pay in taxes is very similar across countries and is not related to the size of the welfare state, the distribution of benefits and taxes or the welfare state regimes commonly used to classify different countries. The article analyses the relationship between these concerns and political rhetoric justifying austerity policies. Show more