Complex Tax Incentives

• 成果类型: Article
• 署名作者: Abeler, Johannes; Jaeger, Simon
• 署名单位: University of Oxford; IZA Institute Labor Economics; Leibniz Association; Ifo Institut; Harvard University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20130137
• 发表日期: 2015
• 页码: 1-28
• 关键词: information suppression; shrouded attributes; fiscal illusion; lottery choice; SALIENCE; elasticity; aversion; average; price

摘要

How does complexity affect people's reaction to tax changes? To answer this question, we conduct an experiment in which subjects work for a piece rate and face taxes. One treatment features a simple tax system, the other a complex one. Subjects' economic incentives are identical across treatments. We introduce the same sequence of additional taxes in both treatments. Subjects in the complex treatment underreact to new taxes; some ignore new taxes entirely. The underreaction is stronger for subjects with lower cognitive ability. Contrary to predictions from models of rational inattention, subjects are equally likely to ignore large or small incentive changes.