EZ-Tax: Tax Salience and Tax Rates
Name
Finkelstein_EZ-tax for 8 2010.PDF
Size
239.46 KB
Format
Adobe PDF
Checksum (MD5)
a8c74e6614f2bd8c45d916aea28c8339
Author(s)
Finkelstein, Amy
Date Issued
August 2009
Journal
Quarterly Journal of Economics
Publisher
MIT Press
Citation
Finkelstein, Amy. “E-ZTAX: Tax Salience and Tax Rates.” Quarterly Journal of Economics 124.3 (2009): 969-1010. © 2009 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Version
Final published version
Abstract
This paper examines whether the salience of a tax system affects equilibrium tax rates. I analyze how tolls change after toll facilities adopt electronic toll collection (ETC); drivers are substantially less aware of tolls paid electronically. I estimate that, in steady state, tolls are 20 to 40 percent higher than they would have been without ETC. Consistent with a salience-based explanation for this toll increase, I find that under ETC, driving becomes less elastic with respect to the toll and toll setting becomes less sensitive to the electoral calendar. Alternative explanations appear unlikely to be able to explain the findings.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1162/qjec.2009.124.3.969
