Tax Compliance and Loss Aversion

Per Engström, Katarina Nordblom (), Henry Ohlsson and Annika Persson

American Economic Journal: Economic Policy, 2015, vol. 7, issue 4, 132-64

Abstract: We study if taxpayers are loss averse when filing returns. Preliminary deficits might be viewed as losses assuming zero preliminary balances as reference points. Swedish taxpayers can to try to escape such losses by claiming deductions after receiving information about the preliminary balance. Using a regression kink and discontinuity approach, we study data for 3.6 million Swedish taxpayers for 2006. There are strong causal effects of preliminary tax deficits on the probability of claiming deductions. Compliance will increase and auditing costs will be reduced if preliminary taxes are calibrated so that most taxpayers receive refunds. (JEL H24, H26)

JEL-codes: H24 H26 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/pol.20130134
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Citations: View citations in EconPapers (62)

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Related works:
Working Paper: Loss evasion and tax aversion (2011)
Working Paper: Loss evasion and tax aversion (2011)
Working Paper: Loss evasion and tax aversion (2011)
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