Duke Law and Economics Society.
​Fifth Annual Triangle Law and Economics Conference​.
Rethinking Tax:
The Panel.
How may the government use Behavioral Economics to increase tax revenues?
The way a product's tax is presented may have implications for its "salience." Panelists discuss whether certain taxes have market salience or political salience, and whether manipulating this salience using behavioral economics may increase tax revenues. Panelists also discuss whether behavioral economics may increase taxpayers' compliance.
Lawrence Zelenak
Professor, Duke Law.
Lawrence Zelenak moderates this panel. He asks, "What motivates people to comply with their taxes, and how may governments take advantage of this?" He also probes the difference between a tax's market salience and political salience. Click below to see his panelist introductions, questions, and a thought of his own on the subject.
David Gamage
Professor, UC Berkeley Law.
A product's tax "salience" affects people's purchasing decisions, and therefore affects tax revenue. Salience may also affect people's voting preferences, but there is less evidence of this. Behavioral economics' ability to affect salience is questionable, yet hopeful. And when it comes to sin taxes, more work must be done on their administrability.
Peter Barnes
Professor, Duke Law.
Certain taxes may be altering the market behavior of taxpayers even when those taxes aren't assessed until tax season. Take the taxes assessed as a part of the ACA, for example. Also, the idea that citizens who pay the most in taxes should get benefits, like an express-lane at the DMV, may have behavioral responses that should be considered.
Jasper Cummings
Counsel, Alston and Bird.
The distinction between the market salience and the political salience of a tax may be as old as the Civil War. Governments have historically taken advantage of a tax's market salience. Also, if you would like more information on how to improve tax revenues, you may consult the National Taxpayer Advocate's Objectives Report.
Kathleen Thomas
Professor, UNC Law.
Behavioral economics may better explain tax compliance than rational actor models. This means the government may implement measures that exploit these findings. For example, tax payers could be required to sign the tax form before they fill it out, so their ethical standards are more salient. Measures like these are inexpensive as well.