So what is subtext? To me, it's as simple as telling something without telling it, or alluding to something with something else. Inference. An extra layer of meaning beneath what is obvious. The thing is, readers are humans, and people have unique cognitive abilities to fill in the blanks by inference, imagination, and reasoning. That's why mysteries are so popular because people have the tendency to want to piece together puzzles, or to induce something that isn't quite there for all the see. That's why literature classes have such great times dissecting literary work, because of the layers of meaning (even perceived), symbolism and subtext.
Take this famous six-word story by Hemingway for example:
Baby shoes for sale. Never worn.
At first glance, the words tell us exactly the facts: someone is selling a pair of baby shoes. It's in new condition.
So, where is the story? The beauty of it lies in the subtext, and it can only reveal itself when the readers think and induce, and make the correct connection and fill in the blanks. On the surface, it reads like a want ad. Hemingway's shortest story is the perfect example of subtext. Nothing else needs to be said. The fact alone tells the story, but the readers need to dig deeper, use their logic, and provide their own experiences to complete the picture and recognize the real meaning.
I absolutely love this technique. While editing, I often would cut words that state the obvious to see if the subtext is loud and clear. There's so much pleasure, at least for me, to say something without explicitly saying it.
Of course, there are times we must clearly express ourselves. Facts, for example, must be revealed. There is a danger of being too obscure, evasive or symbolic. Some readers are rather obtuse and they prefer the writer to tell them everything instead of wondering, "What exactly does he mean?" Even if they enjoy the subtexts, less is often more. Subtexts are best used, anyway, when accompanied by enough facts to aid the readers. In fact, I consider subtext as part of the "show vs. tell" technique, which is ironic since "subtext" means telling something without telling it. But by "showing" the facts and information and then letting the readers "get it" through subtexts, you achieve a certain level of clarity and allow the readers to say, "ah ha!" Readers are not stupid. Award them when they pay attention.