Taxpayer Search for Information: Implications for Rational Attention
American Economic Journal: Economic Policy
vol. 7,
no. 3, August 2015
(pp. 177-208)
(Complimentary)
Abstract
We examine data on capital-gains-tax-related information search to determine when and how taxpayers acquire information. We find seasonal increases in information search around tax deadlines, suggesting that taxpayers seek information to comply with tax law. Positive correlations between stock market activity and search as well as year-end spikes in information search on capital losses when the market performs poorly suggest that taxpayers seek information for tax planning purposes. Policy changes and news events cause information search. These data suggest that taxpayers are not always fully informed, but that rational attention and exogenous shocks to tax salience drive taxpayer information search. (JEL D12, D83, H24, H31, K34)Citation
Hoopes, Jeffrey L., Daniel H. Reck, and Joel Slemrod. 2015. "Taxpayer Search for Information: Implications for Rational Attention." American Economic Journal: Economic Policy, 7 (3): 177-208. DOI: 10.1257/pol.20140050Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H31 Fiscal Policies and Behavior of Economic Agents: Household
- K34 Tax Law
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