Florida Law Review Volume 71 Issue 1 Article 2 Tax Experimentation Michael Abramowicz Follow this and additional works at: https://scholarship.law.ufl.edu/flr Part of the Tax Law Commons Recommended Citation Michael Abramowicz, Tax Experimentation, 71 Fla. L. Rev. 65 (). Available at: https://scholarship.law.ufl.edu/flr/vol71/iss1/2 This Article is brought to you for free and open access by UF Law Scholarship Repository. It has been accepted for inclusion in Florida Law Review by an authorized editor of UF Law Scholarship Repository. For more information, please contact
[email protected]. Abramowicz: Tax Experimentation TAX EXPERIMENTATION Michael Abramowicz* Abstract Random experiments could allow the government to test tax policies before they are enacted into general law. Such experiments can be revenue-neutral, with the tax authority ensuring ex post that average tax revenues received from taxpayers in the treatment and control groups are equal. Taxpayers might thus volunteer even for experiments that would broaden the tax base, for example by eliminating deductions. Continued participation by taxpayers in such experiments would indicate that the proposed reforms are efficient at least if externalities are disregarded. Non-revenue-neutral experiments raise greater concerns about horizontal inequity, but they may be helpful in addressing questions about effects of tax rates and in increasing participation. INTRODUCTION .......................................................................................66 I. REVENUE-NEUTRAL TAX EXPERIMENTS ..................................76 A. A Hypothetical Experiment ..............................................76 1. The Potential Benefit to Taxpayers...........................76 2. Adjustments to Ensure Revenue Neutrality ..............77 3. Evaluation of Experimental Success.........................80 4. Enhancement of Experimental Interpretability...........................................................81 a. Varying the Treatment .......................................83 b.