Subjective Costs of Tax Compliance

64 Pages Posted: 2 Feb 2023 Last revised: 22 Jun 2023

See all articles by Jonathan H. Choi

Jonathan H. Choi

University of Southern California; University of Southern California Gould School of Law

Ariel Jurow Kleiman

Loyola Law School Los Angeles

Date Written: February 1, 2023


This Article introduces and estimates “subjective costs” of tax compliance, which are costs of tax compliance that people experience directly and individually. To measure these costs, we conducted a survey experiment assessing how much taxpayers would pay to reduce the unpleasantness associated with filing a tax return. The experiment revealed that taxpayers are more concerned about inadvertent mistakes in their tax filings than by the time spent on compliance. Respondents also only ascribed meaningful value to eliminating all tax compliance work; they ascribed essentially no value to marginal time savings. Additionally, taxpayers were indifferent between simplification services offered by a private company versus the government.

These findings have important implications for theory and policy. From a theoretical perspective, these survey results call into question the nearly universal practice of using market wages to monetize the time that people spend on tax compliance work. Indeed, our results suggest that people value their tax compliance time at a rate much lower than their hourly wage. Regarding policy, these findings counsel policymakers to think big when it comes to reducing tax compliance costs and focus on simplifications that reduce mistakes rather than merely saving time. They also suggest that policymakers need not be overly concerned about mistrust of government in the context of tax simplification and automation services.

Keywords: tax compliance, tax policy, tax, tax administration, discrete choice, willingness to pay, tax credits, EITC, tax simplification, tax reform

JEL Classification: D61, H20, H24, H26, H83, M48, C83, H40, H31

Suggested Citation

Choi, Jonathan H. and Jurow Kleiman, Ariel, Subjective Costs of Tax Compliance (February 1, 2023). Loyola Law School, Los Angeles Legal Studies Research Paper No. 2023-05, Minnesota Law Review, Forthcoming, Available at SSRN: or

Jonathan H. Choi

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

University of Southern California Gould School of Law ( email )

699 Exposition Blvd.
Los Angeles, CA 90089
United States

Ariel Jurow Kleiman (Contact Author)

Loyola Law School Los Angeles ( email )

919 Albany Street
Los Angeles, CA 90015-1211
United States

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