PERCEPTIONS AND REALITIES OF AVERAGE TAX RATES IN THE FEDERAL INCOME TAX

2018/05/02 by Charles L. Ballard, Sanjay Gupta · 2 citations
Social Sciences · Economics, Econometrics and Finance · #Gender, Labor, and Family Dynamics #Taxation and Compliance Studies #Fiscal Policy and Economic Growth

paper · doi:10.17310/ntj.2018.2.03

Abstract

We asked a random sample of the Michigan population to identify their average tax rate in the federal individual income tax. We find that 84.9 percent of respondents overstate their actual average tax rate, many by very large amounts, with the mean/ median overstatement exceeding 11 percentage points. All demographic groups have substantial overstatements. Regression analysis indicates that, all else equal, average income-tax rates tend to be overstated to a greater extent by (1) those who believe taxes on households like theirs should be lower, (2) those who get taxpreparation assistance, and (3) those who believe tax dollars are spent ineffectively.

Citations

• The Role of Misconceptions in Support for Regressive Tax Reform
• What Are We Weighting For?
• Sample Selection Bias as a Specification Error
• A FURTHER STUDY OF INCOME TAX CONSCIOUSNESS

Cited by

• Teaching Tax Brackets: Evidence From A Randomized Survey Experiment
• When do property taxes matter? Tax salience and heterogeneous policy effects

Related

• Empirical Evidence of the Changing Pattern of Personal Income Taxes Paid by Income Classes, 1951-1962
• Marginal Tax Rates Facing Low– and Moderate–Income Workers Who Participate in Means–Tested Transfer Programs
• The Role of Misconceptions in Support for Regressive Tax Reform
• Individuals’ responsiveness to marginal tax rates: Evidence from bunching in the Australian personal income tax
• Individual tax rates and regional tax revenues: a cross-state analysis