Heard it through the grapevine: The direct and network effects of a tax enforcement field experiment on firms

William Boning, John Guyton, Ronald Hodge and Joel Slemrod

Journal of Public Economics, 2020, vol. 190, issue C

Abstract: Tax enforcement may have deterrent effects that extend beyond directly treated taxpayers, but evidence of such deterrent effects for major sources of revenue is limited. This paper studies the effects of a large-scale field experiment on employer deposits that make up most U.S. tax collections. In-person visits by Revenue Officers have a large direct effect on visited firms' tax deposits. The other clients of visited firms' tax preparers also deposit more tax, a network effect that suggests preparers disseminate information. Aggregating over all links, this network effect accounts for 1.2 times as much revenue as the direct effect. Letters conveying the same message are found to have much smaller direct effects and no measurable network effects.

Keywords: Tax enforcement; Randomized experiments; Networks (search for similar items in EconPapers)
JEL-codes: C93 H26 L14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:190:y:2020:i:c:s0047272720301250

DOI: 10.1016/j.jpubeco.2020.104261

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