Behavioral Biases and Political Actors: Three Examples from US International Taxation

Posted: 6 Jul 2019 Last revised: 7 Aug 2019

See all articles by Reuven S. Avi-Yonah

Reuven S. Avi-Yonah

University of Michigan Law School

Kaijie Wu

University of Michigan

Date Written: July 3, 2019

Abstract

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

Avi-Yonah, Reuven S. and Wu, Kaijie, Behavioral Biases and Political Actors: Three Examples from US International Taxation (July 3, 2019). Available at SSRN: https://ssrn.com/abstract=3414274 or http://dx.doi.org/10.2139/ssrn.3414274

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

Kaijie Wu

University of Michigan

Ann Arbor, MI
United States

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