Working Paper: NBER ID: w19482
Authors: Jeffrey Hoopes; Daniel Reck; Joel Slemrod
Abstract: We examine novel data on searches for capital-gains-tax-related information to determine when and how taxpayers acquire information. We find strong seasonal increases in information search around tax filing deadlines, suggesting that taxpayers seek information to comply with tax laws. Positive correlations between stock market activity and information search and year-end spikes in information search on capital losses suggest that taxpayers seek information for tax planning purposes. Policy changes and news events cause noteworthy information search. Overall, these data suggest that taxpayers are not always fully informed, but that rational attention and exogenous shocks to tax salience drive taxpayer information search.
Keywords: taxpayer information search; capital gains tax; rational attention; tax compliance
JEL Codes: D80; D83; H24; H31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exogenous shocks (like news events) (G14) | increase in information search (D83) |
| urgency of tax deadlines (H26) | increase in searches (R23) |
| stock market activity (G10) | increase in information search (D83) |
| policy changes (J18) | increase in information search (D83) |
| rational attention (D01) | increase in information search (D83) |