Simeon Djankov, Eva (Yiwen) Zhang, 02 July 2021

The advent of online technology in public services has made one ingredient of effective state building – easy taxes – possible to achieve in developing economies. This column describes how, fuelled by new technology, the time that it takes businesses to comply with tax requirements has fallen on average by 91 hours a year and the average number of payments was cut by 11 in the past 15 years. Accommodating policies for expanding the tax base are also needed, so everyone sees the upside from online tax services.

Jan-Emmanuel De Neve, Clément Imbert, Johannes Spinnewijn, Teodora Tsankova, Maarten Luts, 20 May 2021

Tax compliance lies at the heart of well-functioning societies, but the US and Europe spend vast sums annually to enforce it. This column discusses the results of population-wide experiments run in collaboration with the Belgium tax authority beginning in 2014. It finds that simplifying communication from tax administrators can improve tax compliance, nudge taxpayers to pay on time, and make late filers comply more swiftly. Communication – an inherent part of any tax administration – merits more attention from the policy community.

Natasha Sarin, Lawrence H. Summers, 24 April 2020

The US government’s spending needs have been heightened by the COVID-19 crisis. This column identify ways for the US to raise more revenue in a progressive way and estimates that the Internal Revenue Service could generate over $100 billion annually, and perhaps more than $200 billion, by substantially increasing audit rates (with a focus on high-income individuals), improving third-party information reporting, and investing in better technology.

Joel Slemrod, Obeid Ur Rehman, Mazhar Waseem, 15 May 2019

Governments typically seek to reduce tax evasion by increasing the odds of catching tax evaders or by raising the punishments. Using social and psychological motivations may offer another approach to promoting tax compliance. This column analyses two Pakistani initiatives – public disclosure of income taxes and a recognition-and-rewards programme for top taxpayers – and shows that, to the extent that they are effective in influencing private and social behaviour, they potentially offer a cost-effective complement to standard tax-evasion measures. 

Al Slivinski, Nathan Sussman, 20 March 2019

The problem of tax compliance is as old as the levying of taxes. Innovations in tax administration that induce high compliance rates at reasonable cost are extremely important to governments. This column demonstrates how the taille, a tax collection mechanism from medieval Paris, raised compliance by turning the social cost of tax evasion into a private one. It offers a tax collection model that is still relevant to governments today.

Jörg Paetzold, Hannes Winner, 17 December 2016

Since the Global Crisis, many governments around the world have initiated policies against tax evasion and harmful tax avoidance. This column uses data from an Austrian commuter allowance scheme to explore how the design of tax schemes and the social environment affect compliance. A substantial share of employees in the study misreport their commuting distance in order to receive more compensation. Employees also appear to be influenced by the misreporting behaviour of their co-workers, showing how tax evasion can have spillover effects.

Ricardo Perez-Truglia, Ugo Troiano, 20 March 2015

Although most of the tax compliance literature focuses on tax evasion, a significant portion of the tax gap includes tax delinquencies. This column discusses new research about the enforcement of tax debts, including evidence from a field experiment in the US with nearly 35,000 tax delinquents who collectively owe half a billion dollars in taxes. In addition to financial penalties, this research studies the effectiveness of a common ‘shaming’ penalty in which the names, addresses, and other identifying information of individuals and businesses with delinquent taxes are published online.

Tim Besley, Anders Jensen, Torsten Persson, 12 February 2015

The Eurozone sovereign debt crisis has highlighted the problem of tax evasion. This column examines the effect of social norms on tax compliance using the UK poll tax as a natural experiment. Comparing councils where tax evasion spiked more during the poll-tax period to those where it spiked less, there was no systematic difference before the poll-tax period. However, once the poll tax was abolished, tax evasion remained higher in the former group, suggesting that high poll-tax non-compliance created a persistent norm of non-compliance.

Cait Lamberton, Jan-Emmanuel De Neve, Michael Norton, 30 May 2014

Non-compliance with tax costs governments billions, in part because people really don't like paying taxes. This column reports two experiments designed to see if it's possible to make people hate taxes a little less and raise tax compliance. The results indicate that if people are given the opportunity to express a preference (though not actually make the final decisions) on how their taxes are spent, they are much less likely to cheat. Simply by making the tax form more interactive, governments could increase tax compliance, while empowering citizens and improving their attitudes towards taxation.

Raj Chetty, 06 March 2009

Raj Chetty talks to Romesh Vaitilingam about the optimal design of tax policies and social welfare programmes like unemployment insurance. They discuss his work on US public finance as well as new research on how to improve tax compliance in developing countries. The interview was recorded at the American Economic Association meetings in San Francisco in January 2009.

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