August 20, 2014

The generational swing away from "Boo taxes"

An earlier post laid out the basic finding of Gen X and Millennials being distinctly less hysterical about paying taxes than the Boomers, Silents, and Greatest Gen. Today's inequality is in large part the outcome of the tax burden being kicked down the road by earlier generations. I've already discussed what the overall dynamics seem to be behind the shift in sentiment with later generations, so now let's turn to the data for the details on just how stark the split is.

These results come from the General Social Survey, which studies a national probability sample, going back to the early 1970s. The question about taxes asks, "Do you consider the amount of federal income tax which you have to pay as too high, about right, or too low?" We're interested in the "too high" response as a signal of anti-tax sentiment. Only whites were studied, to control for race (which varies quite a bit with later generations), and to look at what's going on with the majority.

There are changes across time periods, and across age groups, that we need to isolate before looking at cohort differences. If we compare one cohort when they were young to another cohort when they were old, or if we compare one cohort during a period of heavy anti-tax sentiment and another cohort during a period of lower sentiment, we'll confuse our generational comparison with age and period comparisons.

I've grouped people into birth cohorts of 10 years, from years ending in a 5 to years ending in a 4, and labeled by the year ending in a 0 that lies in between. For example, one cohort includes those born from 1945 to 1954, and they are labeled the 1950 cohort.

Time periods could not be each individual survey year, as that gives sample sizes that are too small. I looked for local peaks and local valleys in the changes over time, and put the surrounding years into a single time period. This captures periods of higher or lower anti-tax sentiment. There are five periods, each made up of 4 or 5 survey years: 1976-'82, '84-'88, '89-'93, '94-2002, and '04-'12.

The plot below shows the percent of respondents who said their taxes were "too high," tracked across time periods, and shown separately for each cohort. I've restricted people to those aged 18 to 64 -- once retirement, Social Security, and Medicare are within reach, folks stop whining so much about having to pay taxes. Looking only at the 18-64 year-olds lets us feel the pulse of the main tax-paying population.

There are two take-away patterns in this picture. First, all cohorts follow the same general up-and-down movements over time. Everyone felt more "Boo taxes" around 2000 compared to 1990, and everyone lightened up by 2010 compared to 2000.

Nevertheless, the cohorts born from 1915 to 1964 all more or less overlap each other across time, despite their age differences within any given period. This is why their colors are similar to each other -- you don't need to distinguish them, given how similar they are. Greatest Gen is red, Silents are orange, and Boomers are yellow. The early cohort of a generation has a dashed line, the later cohort has a solid line.

The late Boomers (in solid yellow) looked like they were going to pull away in the first couple periods, but by the time they hit 30 around 1990 they had been captured into the upper band on the graph. Both cohorts within Gen X, however, are markedly set apart from that upper band, regardless of time period. Millennials are also low in anti-tax sentiment, below Gen X. They are not shown because they would only appear as a single point in the last period, so that we couldn't see their movement across at least two time periods.

Although the entire society seems to be coming closer together during the nadir of the Great Recession, I think the split will remain into the near future, based on what we can project from the age curves, which we turn to now.

Here we let back in those aged 65 and above, to see how anti-tax sentiment falls off a cliff during a person's 60s. The age groups are 18-29, 30s, 40s, 50s, 60s, and 70s and 80s together (to prevent small sample sizes among the elderly). If most of a cohort hasn't aged through most of a given age group, I left them off the chart. The 1980 cohort, for example, doesn't show up in the 30-39 age group because, as of the most recent survey in 2012, only the early members had gone through a decent amount of their 30s, and the later members had hardly even entered them.

The plot below shows how anti-tax sentiment changes across the lifespan, separated by cohort. The visual coding of the cohorts is the same as the first chart.

Again notice how similar the Greatest, Silent, and Boomer generations are. They don't appear in all age groups, but you can see them all lying along the same curve. As before, the late Boomers looked like they were going to pull away in their youth, but they've aged to be more like the other cohorts in the upper band. They could still stand farther apart in middle age, and serve as a bridge cohort. We'll have to wait and see.

We must emphasize that the early Boomers (in dashed yellow) have remained consistently "Boo taxes," ever since they were youngsters. What kind of people are complaining about taxes being too high when they're 20-somethings? Yet there they are -- hovering between 65-70% from youth through middle age. Once they leave their productive earning years, they will surely lighten up as everyone does, but it is remarkable that have been so rabidly in favor of de-funding public goods and services for their entire productive lives -- while of course voting for more and more public goods to be doled out for their welfare (prescription drugs) and for their entertainment (kicking ass abroad).

And yet they express genuine shock when they hear how high the national debt keeps ballooning -- it's not a cynical defense like, "I am shocked, shocked to find that debt is going on here!" They are sincerely perplexed at how spending and taxing have gotten so outta-whack. The utter lack of self-awareness of their role in sinking our society is breathtaking.

Just speculating now, but why is the early Boomer cohort worse than the others in the band that it belongs to? I blame the Dr. Spock climate that they were raised in -- both at home and when they were out in public. Smothering mothers, permissive parenting, etc., made the early Boomers doubly spoiled during their formative years -- in addition to being spoiled by growing up during the Great Compression, when per capita wealth kept rising, inequality kept falling, and political instability had all but vanished (not until they were around 20 would they see the slight return of organized violence circa 1970).

Moving on to Generation X, they are again in a world apart from the preceding generations. The early X-ers have already aged through their 30s, and although they were more anti-tax than they had been as 20-somethings, they did not rise anywhere near the levels of the upper band. What hints we can glean from their feelings in their 40s (keeping in mind that they haven't all aged through them), suggest that they aren't going to go near the upper band in that age group either. Neither will the late X-ers. They will show the same rise during middle age and decline during their senior years, but it is plain to see their curve lying far below that of the Greatest, Silent, and Boomer generations.

The Millennials are not shown here either because, as of 2012, most of them had not aged through their 20s. They are like Gen X, though, lying somewhat below the late X-ers. We'll have to wait and see if they form a band with Gen X as we and they age. Who knows, though? -- perhaps it will be Gen X that is the bridge generation between the Greatest / Silent / Boomer band above and a band below made up of Millennials plus whoever follows them. Time will tell.

Summing up the psychology behind these dynamics, it looks like people who grow up in periods of falling inequality take that for granted, and are not consciously aware of the norms that support it -- namely, "reining it in" rather than "let the devil take the hindmost." That leads them to break with the earlier norms -- what's the harm of putting me first in the economic and political arena? -- that then leads to rising competitiveness, inequality, and political instability. (See Peter Turchin's model of the competition-and-inequality cycle in this review.)

Those who grow up under this new norm of dog-eat-dog see from an early age how divisive and corrosive it is to the bonds that hold society together. (The last time around, this was the FDR / Eisenhower generation who grew up during the peak of competitiveness and inequality in the early 20th century.) Even as youngsters, they drop out of the mindset of succeeding and gaining status at any cost to others.

The sharp break with those born circa 1970 suggests that our impressions begin as small children, since the '70s were the beginning of the present era of rising competitiveness and inequality. The fact that those born circa 1960 are not so heavily affected suggests that our mindsets harden already by adolescence. It's like the development of our native language -- infancy and childhood are crucial, adolescence not so much, and adulthood not at all.

Eventually enough of the population will be made up of folks with the "reining it in" mindset, and enough of the dog-eat-dog cohorts will have died off, that society swings back in the more egalitarian and stable direction... until the cycle repeats itself all over again.

Nevertheless, divisiveness will not be as bad this time around as it was during the long Gilded Age, up through World War I. We aren't going to have a civil war that was as destructive as the first one, our How the Other Half Lives won't look as filthy and depressing, and our Spanish Flu pandemic won't claim as many victims. That's about the only good news, though, aside from being able to glimpse the light at the end of the tunnel once the Boomers die off. If anything, that's the form that I'd expect a bitter civil war to take this time around -- along cohort lines.

Having to fight alongside the Millennials, if it means putting an end to Boomer (and Silent) dominance? We just might have to. Our slogan is, "Always having to clean up after someone else's mess." Resentful stewardship. It won't be that much more degrading to have to take on the Millennials as sidekicks, as long as we still get to make fun of their dorkiness when we're off the battlefield.

GSS variables: tax, age, cohort, year, race


  1. How much of this has to do with whether your taxes are benefiting you, your family, and your community?

    If taxes are being sent to big banks, large corporations, wars in Iraq, the vibrant inner-city underclass, et cetera, then won't people resent paying those taxes?

  2. I'll put together a follow-up post to see how these patterns change if we do further restrictions, to isolate the source of these generational differences.

    If anything, though, the perceptions that young people have about where their taxes are going should have given the opposite pattern. Back when the Boomers were in their 20s, there was Vietnam, integrated busing... most of which they were in favor of, and not very much corporate welfare. And they had far more goodies to placate their anger, like investment in public places -- roads, buildings, parks, etc.

    As 20-somethings, Gen X had way more to be angry about -- corporate welfare, Iraq / Afghanistan, political corruption, diversity hires, diversity loans, ad nauseam.

    Yet it was the Boomers who were howling about taxes as youngsters.

  3. Since the Millenials are in the same part of the cycle that the Silent Generation was(born during a rapid crime decline), wouldn't they eventually show patterns more like the Silents? I'm thinking the tax alliance will be more late wave Boomers - the Disco generation - and Gen Xers.

  4. "As 20-somethings, Gen X had way more to be angry about"

    Gen X bore the brunt of the social collapse during the '90s. Strauss-Howe call a time of rapidly declining crime rates "the Crisis", because it represents a collapse of social institutions and values.

  5. There are two main cycles that shape the zeitgeist -- the cocooning vs. outgoing cycle (whose result is falling vs. rising crime), and the accommodating vs. status-striving cycle (whose result is falling vs. rising inequality).

    The dialectic seems to be that periods of more and more stability breed a generation that takes it for granted and is more likely to undo that stability in adulthood. Periods of less and less stability breed a generation that takes *that* for granted and is more likely to try injecting more stability back into the system in adulthood.

    Silents and Millennials both have a sense of entitlement from growing up in a permissive child-rearing culture (parents plus other grown-ups who influence kids).

    But Silents grew up taking all those New Deal goodies for granted, and don't see that taxes are necessary to provide them. Whereas Millennials have grown up entirely during the period of corroding infrastructure due to falling taxes, so they realize (however unconsciously) that taxes need to go up if anything, to provide the goods and services they want the govt to provide.

    Millennials are liberals -- they're fine with higher taxes and higher spending. As long as those are roughly proportional, it won't do much to pay down our debt -- although at least it won't send it ballooning even further. They have one source of other-mindedness -- seeing how destructive all this competition is in the econ-poli domain.

    Silents and early Boomers are really-existing libertarians -- much worse than liberals. In practice, libertarians want all sorts of expensive government-provided goodies, they just don't want to pay for them. They have no sources of other-mindedness -- they had it made in the shade in both domains growing up.

    Gen X is conservative -- raised in disorder both in the political-economic domain (rising competitiveness and inequality) and in the social domain (rising crime), they tap into two separate sources of mindfulness toward the common welfare. They want to spend less and tax more.

    There should be a fourth group whose formative years were rising crime but falling competitiveness. This combination only lasted for about 10-15 years, though, from roughly 1960 to 1970 or '75. This is mostly the late Boomers. They have one source of other-mindedness -- growing up in rising-crime, and needing to look out for one another. Their early years were at the nadir of competitiveness, but they went through adolescence when it shifted around. They were not the Me Generation but what followed just after, the Yuppies.

    Overall I see the Late Boomers going with the early Boomers and Silents on taxes, spending, and so on. But they're not so dogmatic and set-in-their-ways like the early Boomers and Silents are, and a good fraction of them could be / already are persuaded that spending less and paying in more is the most constructive thing to do.

  6. ...I can't emphasize enough how weird it's going to be having the conservative X-ers and liberal Millennials joining forces. But when your common enemy is both profligate and tightfisted, hence addicted to debt, there's plenty for everyone to hate.

  7. I think there must be some sense in which generations who've developed in one part of the cycle are complacent about what they get from it - Late Boomers and Generation X don't really have much of a sense of what they might have gained from hands off parenting, a nurturing environment free from excessive parental vigilance, not being totally "awks". While outgoing, they seem pretty content with the world of cocooning, or if not deem it better to keep their guard up.

    On the other hand, generational cycles can't explain everything - based on the current info, the Victorian-Edwardian inequality cycle happened over multiple generations all growing up under increasingly unequal conditions. Perhaps it was harder for them to change.

    On generations and taxes, looking just at the variables - taxrich, taxmid, taxpoor and generation, for 2000-2010.

    Taxrich - Mils and Generation X are more likely to say the taxes are too high on the rich, Silents, Baby Boom and GI too low.

    Taxmid - Mils, Silents and GIs tend to skew more towards about right (even some GI and Silents saying too low) while Boomers and Generation X are more likely to say too high.

    Taxpoor - Mils and Generation X seem to have greater variance at both ends of the spectrum, particularly Mils, while the Silents and Boomers tend to think they're taxed too much and Silent and GI also tend more towards about right.

    So it seems like the Silents, Baby Boom and GI may perhaps more of a realistic view as generations on how much the rich should be paying, although they may have a skewed view on what high income actually is, while the Gen X and Mils seem more willing to personally contribute. A Gen X and Millenials coalition might raise the middle's tax rates, not the rich's - it's all very dependent on where they think the rich start.


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