Replication data for: Taxpayer Confusion: Evidence from the Child Tax Credit

Principal Investigator(s): View help for Principal Investigator(s) Naomi E. Feldman; Peter Katuščák; Laura Kawano

Name	File Type	Size	Last Modified
Make_Analysis_Data.do	text/plain	5.5 KB	12/06/2019 12:00:PM
Make_Placebo_Data.do	text/plain	2.9 KB	12/06/2019 12:00:PM
README.pdf	application/pdf	380.7 KB	12/06/2019 12:00:PM
Secion_3_Summary_Stats.do	text/plain	1.2 KB	12/06/2019 12:00:PM
Section_4A_Main_Results.do	text/plain	6.1 KB	12/06/2019 12:00:PM
Section_4C_Robustness_Tests.do	text/plain	1.8 KB	12/06/2019 12:00:PM
Section_4D_Alternative_Variables.do	text/plain	9.8 KB	12/06/2019 12:00:PM
Section_4E_Heterogeneity.do	text/plain	3.4 KB	12/06/2019 12:00:PM

Project Description

Summary: We develop an empirical test for whether households understand or misperceive their marginal tax rate. Our identifying variation comes from the loss of the Child Tax Credit when a child turns 17. Using this age discontinuity, we find that despite this tax liability increase being lump-sum and predictable, households reduce their reported wage income upon discovering they have lost the credit. This finding suggests that households misinterpret at least part of this tax liability change as an increase in their marginal tax rate. This evidence supports the hypothesis that tax complexity can cause confusion and leads to unintended behavioral responses. (JEL D12, D14, H24, H31)

Scope of Project

JEL Classification:
      D12 Consumer Economics: Empirical Analysis
      D14 Household Saving; Personal Finance
      H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
      H31 Fiscal Policies and Behavior of Economic Agents: Household

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Published Versions

V1 [2019-12-06]

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