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Estimating Income Tax Salience

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  • Dominic Coey

    (Department of Economics, Stanford University)

Abstract

I develop a procedure for estimating how accurately people perceive their income tax schedules. Using Survey of Income and Program Participation data on hourly-paid workers, I reject the hypothesis of fully salient taxes. Younger workers seem particularly prone to misperceiving their taxes. Even for younger workers, however, the welfare losses associated with this less than full salience appear to be small.

Suggested Citation

  • Dominic Coey, 2011. "Estimating Income Tax Salience," Discussion Papers 10-026, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:10-026
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    File URL: http://www-siepr.stanford.edu/repec/sip/10-026.pdf
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    References listed on IDEAS

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