Wednesday, April 21, 2010

Invisible Tax Work by Professor Galle

For those who want to work further on the visibility of taxes, you will find this note I received to be of interest. The "visibility" hypothesis is seductive, but never confirmed with actual observations - the best kind of topic for research!

emailed to me from bgalle at

"I've made similar claims [that visible taxes do not help restrain spending], albeit informally (not mathematically modeled) and in fora not usually of interest to economists (i.e., in law journals).

One place is pp. 41-48 of this piece, "Hidden Taxes," Another is pp. 59--62 of this piece,, which has a long title but is about the AMT. The argument of both is that hidden taxes may on net reduce tax levels, because sophisticates increase their own lobbying effort in response to their awareness that naives who do not lobby exist.

I'm also interested in modeling these intuitions more rigorously, as well as testing them empirically, but my own math skills are more suited to discussing rather than crafting such work. If you have or know of graduate students with similar interests, please feel free to put them in touch.

Many thanks.


Brian Galle
Visiting Associate Professor
George Washington University Law School (2009-10)

Assistant Professor
Florida State University College of Law"

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