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Estimating Income Tax Salience

May 2011
Working Paper
10-026
By  Dominic Coey
I develop a procedure for estimating how accurately people perceive their income tax schedules. Using Survey of Income and Program Participation data on hourly-paid workers, I reject the hypothesis of fully salient taxes. Younger workers seem particularly prone to misperceiving their taxes. Even for younger workers, however, the welfare losses associated with this less than full salience appear to be small.