Estimating the Costs of Filing Tax Returns and the Potential Savings from Policies Aimed at Reducing These Costs

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 ste...

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Bibliographic Details
Published in:Tax policy and the economy 2021-01, Vol.35 (1), p.55-85
Main Author: Benzarti, Youssef
Format: Article
Language:English
Subjects:
Cost control
Cost reduction
Tax returns
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Summary: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, prepopulating tax returns and offering free filing options can result in substantial cost savings for taxpayers.
ISSN:0892-8649
1537-2650
DOI:10.1086/713493