Behavioral Economics and Tax Policy

William Congdon, Jeffrey R. Kling, Sendhil Mullainathan

NBER Working Paper No. 15328
Issued in September 2009
NBER Program(s):   PE

Behavioral economics is changing our understanding of how economic policy operates, including tax policy. In this paper, we consider some implications of behavioral economics for tax policy, such as how it changes our understanding of the welfare consequences of taxation, the relative desirability of using the tax system as a platform for policy implementation, and the role of taxes as an element of policy design. We do so by reviewing the logic of specific features of tax policy in light of recent findings in areas such as tax salience, program take-up, and fiscal stimulus.

(68 K)

Published: National Tax Journal, 62:3 (September 2009), 375-386.

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Acknowledgments

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