Tuesday, February 3, 2009
In the world of tax compliance, perceptions matter a good deal. A well-known experiment for the Minnesota Department of Revenue showed that people who believe that tax compliance is high report their own income accurately and pay in full. In other words, people pay what they owe if they believe everyone else is also paying what they owe. ...
[S]tories that Daschle (and others) under-reported are likely to have a negative effect on compliance. Overall, it is likely that most members of Congress and high-ranking members of the Executive branch (and the judicial branch for that matter) faithfully pay what they owe. So here is a proposal: let’s audit them all. The details of their returns need not be released, just final information on whether they owe back taxes. (Some might even be entitled to a refund!) News that Daschle is an exception to the pattern of overall compliance would be good tax news indeed.