Oh, sure, sounds like a great non-scary idea to me.
Behavioral Experiment Transparency vs Burden
Solicitation Number: TIRNO-11-Q-00349
Agency: Department of the Treasury
Office: Internal Revenue Service (IRS)
Location: National Office Procurement (OS:A:P)
The Internal Revenue Service (IRS) intends to issue a sole sourced purchase order to the University of Minnesota’s Social Behavior Science Division Research Professors: Marsha Blumenthal and Laura Kalambolidis, for research experiments, data to explore the impacts of Behavioral experiments of alternative reporting regimes: transparency vs. burden.
BACKGROUND: The project involves a three-stage laboratory experiment to explore taxpayers’ willingness to accept increased reporting burden in exchange for either earnings or non-transparency of earnings to the authority. The first stage is designed to induce subjects to reveal their tendency to under-report taxable earnings in a voluntary reporting system with random audits and penalties for under-reporting. The second stage tests subjects’ willingness to pay for burden reduction when there is no opportunity to under-report earnings. The third stage presents subjects with two alternative regimes. One regime shall have no reporting burden, there shall be no opportunity to misreport. In the alternative regime subjects shall have to track their earning (a burden,) but subjects shall have the opportunity to increase their payoff by misreporting. Using our knowledge from the first two stages about subjects’ tendency to under-report, analysis of third stage behavior shall tell us whether the regime choice is an effective mechanism for separating compliant and non-compliant taxpayers.
Neat.
Here’s a thought: get rid of the income tax and go to a simple end-user consumption tax. All these problems go away. No need to mess about with psychological studies about this or that.
