The Effects of Introducing Withholding on Tax Compliance: Evidence from Pennsylvania’s Local Earned Income Tax

Sutirtha Bagchi

National Tax Journal, 2025, vol. 78, issue 2, 327 - 367

Abstract: This paper examines Act 32, which mandated the introduction of withholding for the local income tax for all employees and the consolidation of a fragmented collection system to one collector per county, effective January 1, 2012, for Pennsylvania local governments. Using a difference-in-differences research design, I find that the act resulted in increased collections of the local income tax by about 9 percent. Results examining the heterogeneous impact of Act 32 show that the effects were larger where fewer residents had been subject to withholding prior to the reform and in counties that experienced a greater consolidation of tax collection.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1086/733662 (application/pdf)
http://dx.doi.org/10.1086/733662 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: The Effects of Introducing Withholding on Tax Compliance: Evidence from Pennsylvania’s Local Earned Income Tax (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:nattax:doi:10.1086/733662

Access Statistics for this article

More articles in National Tax Journal from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().