The Behavioralist As Tax Collector: Using Natural Field Experiments to Enhance Tax Compliance
Tax collection problems date back to the earliest recorded history of mankind. This paper begins with a simple theoretical construct of paying (rather than declaring) taxes, which we argue has been an overlooked aspect of tax compliance. This construct is then tested in two large natural field experiments. Using administrative data from more than 200,000 individuals in the UK, we show that including social norms and public goods messages in standard tax payment reminder letters considerably enhances tax compliance. The field experiments increased taxes collected by the Government in the sample period and were cost-free to implement, demonstrating the potential importance of such interventions in increasing tax compliance.
We would like to thank Her Majesty's Revenue and Customs, the UK Cabinet Office's Behavioural Insights Team (now The Behavioural Insights Team), and TNS BMRB. In particular, Pedro Wrobel, Nick Down, David Halpern, Jackie Simms, Lesley Titley, Matt Cole, Dawn Reade, Simon Bradford, Mike Holgate, Bob Appleton, Gordon Smith, Graham Brammer, Mike Drewery, Michelle Harrison, and Ara Darzi. We thank David Novogordsky for his research support. We are grateful for the comments given by seminar participants at IFS-UCL, UCSD, Georgia State University, University of Wyoming, the 1st International Conference on Public Policy, the AEA/ASSA 2014 conference, and the 2014 FAU Taxation, Social Norms and Compliance conference; and those given by Hunt Allcott, James Alm, Stefano DellaVigna, Greer Gosnell, Erich Kirchler, Mark Phillips, Michael Price, Steven Sheffrin, and Richard Thaler. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. The trials were funded as part of routine administration work carried out by HM Revenue and Customs. Michael Hallsworth is currently employed by the Behavioural Insights Team.
- Both norm-based and public-good messages increased the likelihood of individuals paying their taxes due... Governments lose billions...
Hallsworth, Michael & List, John A. & Metcalfe, Robert D. & Vlaev, Ivo, 2017. "The behavioralist as tax collector: Using natural field experiments to enhance tax compliance," Journal of Public Economics, Elsevier, vol. 148(C), pages 14-31. citation courtesy of