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Consumer Misconceptions about Tax Laws: Results from a Survey in the United States

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  • Elizabeth Lyon

    (California State University, Sacramento)

  • J. R. Catlin

    (California State University, Sacramento)

Abstract

A survey of 1,131 consumers in the United States identified substantial gaps in knowledge or literacy with respect to fundamental U.S. tax law concepts of withholding and tax liability, tax brackets, tax deductions versus credits, charitable contributions, income and exclusions (gifts), and payroll/self-employment tax. Rates of misunderstanding of each concept ranged from 30% to 79%. Regression analysis suggests tax literacy was higher among males and consumers who were older, more educated, and had higher household incomes. Self-reported tax knowledge was weakly correlated with objectively measured knowledge (r = .37, p

Suggested Citation

  • Elizabeth Lyon & J. R. Catlin, 2020. "Consumer Misconceptions about Tax Laws: Results from a Survey in the United States," Journal of Consumer Policy, Springer, vol. 43(4), pages 807-828, December.
    • Handle: RePEc:kap:jcopol:v:43:y:2020:i:4:d:10.1007_s10603-020-09460-2
    DOI: 10.1007/s10603-020-09460-2
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