Information and IRA participation: the influence of tax preparers

• 成果类型: Article
• 署名作者: Hrung, WB
• 署名单位: United States Department of the Treasury
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(00)00107-9
• 发表日期: 2001
• 页码: 467-484
• 关键词: individual retirement accounts; tax preparers; panel data

摘要

The steep drop-off in the number of Individual Retirement Account (IRA) contributors after 1986 has led to suggestions that taxpayers misunderstood and over-reacted to the restrictions on deductible contributors imposed by the Tax Reform Act of 1986. Tax panel data is used to investigate the role of taxpayer misunderstanding in the drop-off in IRA contributors after 1986. The hiring of a tax preparer is the transmission mechanism for knowledge of the deductibility rules after 1986. The results suggest that more information and promotion of IRAs would have increased the probability of contributing to an IRA in 1987 for high income taxpayers, but would have decreased this probability for middle-income taxpayers. Taxpayer confusion over the deductibility restrictions appears to have been resolved by 1988. Therefore, taxpayer misunderstanding did not play a major role in the steep drop-off in the number of IRA contributors after 1986. Published by Elsevier Science.