How Taxing Is Tax Filing? Using Revealed Preferences to Estimate Compliance Costs.Youssef Benzarti
NBER Working Paper No. 23903 This paper uses a quasi-experimental design and a novel identification strategy to estimate the cost of filing income taxes. First, using US income tax returns, I observe how taxpayers choose between itemizing deductions and claiming the standard deduction. Taxpayers forgo tax savings to avoid compliance costs, which provides a revealed preference estimate of the compliance cost of itemizing. I find that this cost increases with income, consistent with a higher opportunity cost of time for richer house- holds. Second, using my estimates and estimates of the time required to file other schedules, I estimate the cost of filing federal income taxes. I find that this cost has been increasing since the 1980’s and has reached 1.2% of GDP in the most recent years. A non-technical summary of this paper is available in the January 2018 NBER Digest.
You can sign up to receive the NBER Digest by email.
Machine-readable bibliographic record - MARC, RIS, BibTeX Document Object Identifier (DOI): 10.3386/w23903 Users who downloaded this paper also downloaded* these:
|

Contact Us