Shaming Tax Delinquents: Theory and Evidence from a Field Experiment in the United States

Source: Ricardo Perez-Truglia, Ugo Troiano, National Bureau of Economic Research (NBER), NBER Working Paper No. w21264, June 2015
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From the abstract:
We study shaming as a policy to improve tax debt collection. First, we show that when the tax agency focuses on private welfare and revenues, the optimal policy may involve a mix of financial and shaming penalties. Second, we present evidence from a field experiment with 34,344 tax delinquents who owed half a billion dollars in three U.S. states. We find that increasing the salience of financial and shaming penalties reduces tax delinquency. We also provide suggestive evidence that the effectiveness of these penalties depends on the garnishability of the debtor’s income as in the model.