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Public opinion and taxation: the surprising reality

Why your assumptions about tax may be wrong

By Ben Szreter and Alexandra Burns

Who wants to pay more tax? Probably more people than you think.

If you were paying attention to the Conservative leadership campaign that played out last summer, you’d have noticed that tax – or rather tax cuts – were the hot topic. It wasn’t the first time that the promise of tax cuts formed a core component of a political campaign and it won’t be the last – both main Westminster parties are already starting to float different forms ahead of the next general election.

Tax is critical: for governing because it affects the balance sheet available for spending on public services, for politics because where the taxes fall indicates differing ideology, and for the public because it affects individuals very directly.

That’s why, working with the Institute for Fiscal Studies (IFS), we are taking a closer look at the tax landscape as part of our UK 2040 Options work. Today, with the IFS, we have jointly published a set of fundamental facts, and we are developing more work together for release next year.

Large demands for public spending are being created by a combination of demographic pressures, high inflation, rising debt costs, sluggish economic growth and weakened public services. The choice for politicians is difficult –  there are no easy cuts to make. The major tool for tax increases has been freezing tax thresholds, stealthily bringing in substantial revenue. But if the economy continues to struggle, rather than tax cuts, the government will be forced to consider increasing taxes in a more visible way. The concern for all parties will be whether the public are prepared to pay more.

But what do the public think about taxes? We’ve used survey data, both existing and new,  to try to answer three questions. Firstly, what does existing data tell us about how people in Britain feel about the amount of tax they pay, and how has that changed over time? Secondly, how much does the framing of the question asked about tax matter? And finally, how accurate are the public about what others think about tax? According to our findings, the answers are likely to surprise you.

How do people feel about taxes in the UK overall?

The prominence of tax in the political debate doesn’t seem to match the level of importance the public assigns it. For example, the Ipsos Issues Index in August 2023 shows that only 4% of the public identify tax as one of the most important issues facing Britain today. The highest level this figure has ever reached is 14% and that was in March 1979, a year before our current prime minister was born.

What does the public feel about the level of tax we pay? If you were to consult the British Social Attitudes (BSA) survey for an answer to this question, the answer is that a majority of the British public are in favour of higher taxation, with 52% of survey respondents saying so in 2021. They’ve been reporting on this for decades, and while the “raise taxes” and “keep them the same” options have both vied for the top spot over the years, “reduce taxes” has never come close, staying in the single digits.

This is publicly available information from a nationally representative survey so you might wonder why politicians would be so focussed on tax cuts in this context. One hypothesis could be that different kinds of voters have different views on this issue and therefore those wanting to appeal to a certain group focus on it for this reason.

We also asked this question to people in battleground constituencies in our recent polling for UK 2040 Options. Asking the same question as the BSA, we found broadly similar results. Respondents were divided between those who want to keep tax at current levels (38%) and those who want to raise taxes (36%). Just 12% expressed a preference for lower taxes. Even among people who previously voted Conservative and thus who may traditionally support a smaller state, we found just 15% in battleground constituencies want to cut taxes and spend less.

So, at this level at least, that hypothesis doesn’t seem to hold out. What else could it be?

The answer is in part that these survey headlines mask an important detail – the question asked directly links tax to spend.

Framing makes a difference

The specific question asked in the BSA survey is:

“Suppose the government had to choose between these three options. Which do you think it should choose?

  • Reduce taxes and spend less on health, education and social benefits
  • Keep taxes and spending on these services at the same level as now
  • Increase taxes and spend more on health, education and social benefits.”

The way this question is framed draws a direct link between taxes and spending on “health, education and social benefits” — topics that we know the public care about. What happens if we remove that framing?

We ran a further piece of polling, this time with just over 3,000 people across England. For around 2,000 of them we asked the same question that BSA uses (see left column of the table below). For the other 1,000 we changed the response options to link tax to spend more generally (right column):

With the standard question used in the BSA, the answers from our new polling were close to the other surveys: 35% say they want increased taxes, 41% say they want taxes kept the same and 15% want taxes reduced. But the new framing made a big difference. There was a 15 percentage point drop in those saying taxes should increase, a six percentage point drop in those saying taxes should stay the same and a 22 percentage point rise in those wanting taxes to reduce.

These differences are pretty stark. Framing matters.

Some would argue that the BSA framing is a crucial reflection of reality, being clear that tax cuts mean having less to spend on key public services. But others would say that the impact of tax cuts for the public is dependent on other economic or fiscal choices, that where public spending cuts fall is a matter of priorities, and therefore the framing is too leading.

Our findings do not tell us what’s right or wrong, or give us the entire picture. They do not tell us whether people’s attitudes on tax are a strong predictor of their actual voting behaviour, or what happens to opinion when the rubber hits the road on the campaign trail and tax is made a totemic issue.

Indeed, support for increased tax in a general sense may not always translate into an increased willingness for individuals to pay more tax themselves. But it does show us that framing matters when talking about taxes with the public, and political parties will want to be mindful of it, whichever argument they’re trying to make.

Are our instincts about what others think about tax right?

Pluralistic ignorance, a social phenomenon where people as individuals misjudge the public mood, can be striking. For example, in Saudi Arabia recent research showed that most men personally thought that women should be allowed to work outside the home, but when asked how other men think, the majority (incorrectly) expected other men to be much less accepting of this.

Could this kind of incorrect assumption be at work when it comes to our views about tax? In short, yes.

We asked the same 3,000 people to imagine 100 average adults in the country and guess their collective appetite for tax rises, status quo taxes or tax cuts.

In both of the question styles (with and without the specific spending framing), people consistently thought that others were more likely to want tax cuts than is true. They also thought that people were less likely to want tax increases than they actually were.

On average across all respondents people thought that others were 13 percentage points more likely to want tax cuts than they actually are (39% vs. 26%), eight percentage points less likely to want taxes to stay the same than they actually were (34% vs. 42%) and four percentage points less likely to want tax increases than they actually were.

If looking at this across the whole electorate (using the 2019 general election registered voters of 47.5 million as a baseline) this means that people on average think around 18.6 million voters want tax cuts when actually only around 12.4 million do; an average overestimation of more than six million people.

Death and taxes

“In this world nothing can be said to be certain, except death and taxes” – a phrase most closely associated with Benjamin Franklin. But while taxes (and indeed death) remain a certainty, it seems the perceptions of them are highly influenced by the precise question asked, and our understanding of attitudes towards tax certainly isn’t certain.

This has implications for the way that policymakers of all political stripes should seek to understand and interpret the public view on tax, and also how they then apply that to decision making and communication.