Subjective Costs of Tax Compliance

67 Pages Posted: 2 Feb 2023 Last revised: 29 Mar 2023

See all articles by Jonathan H. Choi

Jonathan H. Choi

University of Minnesota Law School

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, eliminating tax compliance time for high-income taxpayers and taxpayers with complex returns is not worth much more than eliminating tax compliance time for low-income taxpayers with simple returns.

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, focus on simplifications that reduce mistakes rather than merely saving time, and prioritize reforms that affect low-income taxpayers.

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, Available at SSRN: or

Jonathan H. Choi

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
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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