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Third‐Party Tax Administration: The Case of Low‐ and Moderate‐Income Households
Author(s) -
Barr Michael S.,
Dokko Jane K.
Publication year - 2008
Publication title -
journal of empirical legal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.529
H-Index - 24
eISSN - 1740-1461
pISSN - 1740-1453
DOI - 10.1111/j.1740-1461.2008.00147.x
Subject(s) - receipt , business , welfare , public economics , administration (probate law) , income tax , state income tax , labour economics , tax reform , economics , demographic economics , accounting , market economy , political science , law
Using a unique household‐level data set, this article investigates the tax‐filing experiences and refund behavior of low‐ and moderate‐income (LMI) households. We document households’ tax‐filing behavior, attitudes about the withholding system, use of tax refunds to consume and save, and the mechanisms by which households would prefer to receive their income. We also document the prevalence of the use of tax‐preparation services and the receipt of tax refunds and refund‐anticipation loans. Finally, we argue that there may be a role for tax administration to enable LMI households to make welfare‐improving financial decisions.