An Investigation of Taxpayer Attitudes Towards Provisions: Framing Tax Loopholes and Tax Preferences

Abstract

Federal income tax provisions are designed to incentivize taxpayers' behavior and, in practice, they may change taxpayers' marginal tax rate. Understanding taxpayer attitudes towards a tax provision is necessary for policy makers to properly project taxpayer compliance and the related tax revenues. It may also help policy makers to understand how taxpayers perceive provisions of the tax system. This study examines the effect of framing on taxpayer attitudes. I analyze previous framing and tax compliance literature to understand whether taxpayer attitudes towards tax provisions differ if they are presented (framed) to people as "tax loopholes" versus "tax preferences." In addition, I propose a survey methodology that could measure the effect of this differential framing on taxpayer attitudes. The proposed methodology can be performed in the future to provide quantitative data to test the proposition that, in this setting, framing can affect taxpayer attitudes.