Inattention and the Taxation Bias

• 成果类型: Article
• 署名作者: Boccanfuso, Jeremy; Ferey, Antoine
• 署名单位: University of Bologna; Institut d'Etudes Politiques Paris (Sciences Po)
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvad056
• 发表日期: 2023
• 页码: 1452-1494
• 关键词: collective dynamic choice; tax salience; capital taxation; fiscal rules; US; DISCRETION; elasticities; COMPETITION; reputation; people

摘要

This paper shows that inattention to taxes generates a time-inconsistency problem in the choice of tax policy, leading to higher taxes in equilibrium. These discretionary tax increases are inefficient as they are deviations from the socially optimal commitment policy. We call these deviations a taxation bias. Combining sufficient statistics and structural approaches, we quantify the magnitude of this policy distortion for the U.S. redistributive tax-transfer system. We find that the taxation bias ranges between 3 and 8 percentage points, alters tax-transfer progressivity, and has significant welfare effects. Overall, our findings shed new light on the implications of inattention and misperceptions.