Accuracy, Complexity, and the Income Tax

27 Pages Posted: 26 Dec 2000 Last revised: 30 Aug 2010

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: January 1994

Abstract

The complexity of the income tax is an unending source of complaint. Compliance costs have received increasing attention and are estimated to be large. Yet most recognize that some degree of complexity is necessary if ability to pay is to be measured accurately. This article presents a framework for analyzing the value of greater accuracy in income taxation. Formulations for both distributive and incentive benefits of accuracy are offered. The question whether taxpayers have excessive or inadequate incentives to acquire information about taxable income and to challenge tax assessments is also examined.

Suggested Citation

Kaplow, Louis, Accuracy, Complexity, and the Income Tax (January 1994). NBER Working Paper No. w4631. Available at SSRN: https://ssrn.com/abstract=254528

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