Why Examples? Towards More Behaviorally-Intelligent Regulation

53 Pages Posted: 26 Jul 2017  

Yariv Brauner

University of Florida - Levin College of Law

Date Written: July 24, 2017

Abstract

Tax regulation authors habitually infuse regulations with explanatory examples. These examples are viewed favorably by both the government that encourages their drafting and the taxpayers who regularly rely on such examples to assist them in dealing with the notoriously complex tax rules. Despite the ubiquity of these examples, there is no published guidance for their drafting, their use, or their interpretation. The first original contribution of this Article is the exposition and classification of the advantages and deficiencies in the current use of examples in tax regulations. This Article is the first to question the rationale behind the ubiquitous use of examples in tax regulations. The Article uses data collected by original surveys of expert tax professionals and government employees involved in drafting tax regulations. The second original contribution of this Article is the explanation of the appeal of these examples among tax experts, and the potential hazards of the examples despite this apparent appeal. This analysis uses insights from behavioral science, and particularly from the study of cognitive biases, to explain, for example, how anchoring via an example could shift the focus of a regulatory rule and alter the boundaries of the law in inappropriate or unfair ways. Relying on this analysis, the Article finally proposes — the third original contribution — a better-informed approach to the writing of examples in tax regulations.

Keywords: Tax, Regulation, Regulatory interpretation, behavioral law and economics, cognitive biases

JEL Classification: K34

Suggested Citation

Brauner, Yariv, Why Examples? Towards More Behaviorally-Intelligent Regulation (July 24, 2017). Available at SSRN: https://ssrn.com/abstract=3008261

Yariv Brauner (Contact Author)

University of Florida - Levin College of Law ( email )

P.O. Box 117625
Gainesville, FL 32611-7625
United States
3522730949 (Phone)

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