Behavioral Biases and Political Actors: Three Examples from US International Taxation
Posted: 6 Jul 2019 Last revised: 7 Aug 2019
Date Written: July 3, 2019
The literature on behavioral public finance has tended to focus on the biases of taxpayers. However, politicians and government agents are human as well and can be expected to show the same biases that we are all subject to. This chapter will examine three examples of availability heuristic arguably influencing political actors and the unintended consequences of their reactions. The examples are all from US international tax rules: the foreign investment in real property tax act (FIRPTA) (1980), the exit tax on US citizens who expatriate (2008) and the enforcement of withholding tax on dividend equivalents (2010).
Keywords: behavioral public finance
JEL Classification: H26
Suggested Citation: Suggested Citation