Friday, July 28, 2017

A Factor Affecting the Payment of Taxes

The conventional wisdom is that people loathe taxes; and pay them only because of threats from the government to do so. 

However, an experiment done over 20 years ago by the Minnesota Department of Revenue regarding compliance in paying taxes came up with an unexpected result. The experiment worked as follows: Those participating in the experiment got one of four possible letters regarding tax payment.

(1) A letter emphasizing the social goods that are served by compliance: education, police, fire, health, etc.

(2) A letter emphasizing the penalties for non-payment;

(3) A letter emphasizing how they could get help in filling out the form;

(4) A letter emphasizing that more than 90 percent of Minnesotans already complied by paying their taxes.

Which letter seemed to work best?

Interestingly enough, extolling the benefits stemming from being a good citizen, threatening penalties for noncompliance, or offering help had little effect on compliance. Only one thing did: the information that most people have already complied by payment of their taxes in the past . The power of example, and the tendency to do like others do, served as a motivator for people.

Indeed, the I.R.S. (not a particularly popular governmental agency) might be following a counterproductive strategy by emphasizing penalties for noncompliance in payment of taxes. Why not simply send everyone who pays her or his taxes a note thanking them for paying, like most of their fellow citizens, their taxes?

And it would be really nice if the note was written longhand, on nice "thank you note" stationary. A little bit of the personal touch would possibly counter the alienation or the "us versus them" orientation of so many people.

The sale of war bonds during World War II showed that. For many, it was one of the ways they could contribute to the war effort.


Princess Lum, after she paid her taxes,
was left only with a swim suit and boots.

That left her wondering what she would have
been her penalty for nonpayment of taxes!



16 comments:

  1. A very naive idea, in a way. I don't think thank you notes work on Wall Street.

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  2. I think this experiment should be replicated using samples from other states. Is conformity more common in the Midwest?

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  3. Poor Princess Lum!
    I hope you never find yourself in a similar state.

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  4. Gee, maybe some people really do like doing things for the general good.

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  5. A new jobs program. Thank you note writers.

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  6. That's Minnesota. Not sure it would work elsewhere. Nice thought, though.

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  7. I love Princess Lum. And appreciate your point, Angel. "the tendency to do like others do" defines our species. Safer in the thick part of the herd

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  8. Very interesting! Encouraging the herd mentality pays off.

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  9. Cooperation for the common good is the surest foundation for any society. Hope we an get back to that.
    Perhaps our culture has taken a step back to be able to leap forward.

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  10. It'll never work ... where will they find enough people who still know how to write in cursive?

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  11. It sounds persuasive; I dont know.

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  12. That's a cute swimsuit the girl is wearing.

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  13. Not sure it would work elsewhere. Nice thought, though.


    หนังตลก

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  14. Too simple to work?

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