Working Paper: NBER ID: w27946
Authors: Youssef Benzarti
Abstract: This paper estimates the cost of filing taxes and assesses several policy proposals aimed at reducing these costs. Using US tax returns, a quasi-experimental method and additional extrapolations based on survey evidence, I uncover three main findings. First, filing costs are large and have been steadily increasing over time. Second, part of this increase in filing costs can be attributed to an increase in the number of schedules filed per taxpayer. Third, pre-populating tax returns and offering free filing options can result in substantial cost savings for taxpayers.
Keywords: tax filing costs; compliance costs; tax policy; quasi-experimental method
JEL Codes: H0; H20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| changes in the standard deduction (H20) | taxpayer behavior (H26) |
| filing costs (K41) | taxpayer behavior (H26) |
| number of schedules filed per taxpayer (H20) | filing costs (K41) |
| prepopulating tax returns and offering free filing options (H26) | cost savings for taxpayers (H20) |