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

Elizabeth Lyon () and J. R. Catlin ()
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Elizabeth Lyon: California State University, Sacramento
J. R. Catlin: California State University, Sacramento

Journal of Consumer Policy, 2020, vol. 43, issue 4, No 6, 807-828

Abstract: 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

Keywords: Tax law; Tax policy; Consumer knowledge; Tax literacy; Financial literacy; Survey (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10603-020-09460-2

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