NY Times: Shaming Delinquent Tax Payers Is An Awesome Idea

Over the last few years, we’ve heard lots of talk about not shaming people, especially when it comes to “body shaming” and “slut shaming”. But, hey, what about when it comes to taxes? The NY Times publishes an op-ed by Ricardo Perez-Truglia and Ugo Troiano

Shaming Those Who Skip Out on Taxes

IN 2006, according to an estimate by the United States Treasury Department, Americans underpaid their taxes by about $450 billion. For that year, that’s roughly equal to Pentagon spending, and more than the gross domestic products of Sweden and Switzerland.

A good chunk of the missing tax revenues comes from underreporting income, or tax evasion. The rest, roughly 25 percent — about $110 billion — comes from failure to pay taxes, or tax delinquency. (snip)

But traditional collection methods don’t always work. In a recent study, we used another strategy that got results: publicly shaming tax delinquents. It should be a key part of government efforts to increase the collection of tax debts, and thanks to the Internet and social media, the government has the means to make it even more effective.

Public shaming is already used throughout the world to collect taxes. The city of Bangalore, India, hires drummers as tax collectors to visit the homes of tax evaders and to literally bang the drum if they don’t pay. In England, Her Majesty’s Revenue and Customs publishes details of deliberate tax defaulters. Argentine local governments are also adopting shaming lists.

They are also used to a limited extent in the United States. Nearly two dozen states — among them California, Massachusetts and New York — publish online lists on state websites revealing the identities of tax delinquents.

So, these two decided to run an experiment, where they sent letters to delinquents. They had two groups, and, for the second, they sent letters about the delinquency to not only the person, but their neighbors. It did work to increase payment. But, is this ethical?

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Tax agencies could also make the delinquency records more conspicuous by advertising the existence of the lists on the Internet and television and even in tax forms.

Social media offers an even greater opportunity for shaming. Tax agencies could use targeted online advertisements on social networks to raise awareness among the social contacts of delinquents.

So, not only should people be liable for penalties from government, but they should be publicly shamed by every method possible.

That said, shaming penalties come at a cost: the violation of privacy.

Yeah, but….

This could change as open disclosure becomes more common. Indeed, government agencies are increasingly filling the Internet with detailed lists of Americans’ activities, from their political campaign contributions to their criminal records.

So, these two are advocating that the Government publicly shame citizens, and making it very normal.

We believe that shaming policies are an effective tool and should be part of the effort to make citizens pay their fair share. More effective and fair tax collection will fund the infrastructure, research and education that pave the way for economic growth and opportunity.

OK, fine. Since these two are obviously Big Government Liberals, how about we shame all those who advocate for higher taxation and people paying their “fair share” yet do all they can to minimize their own tax burden? Those who take advantage of tax deductions and “loopholes”, as Liberals term them, in order to pay a lower effective tax rate? How about all those who work for government who owe $3.5 billion in back taxes?

Anyhow, what happens when these shamed people commit suicide? Will the authors be held responsible? They are advocating publicly shaming people who owe as little as $2,500. What of those who hit hard times (often thanks to economic and other policies from the same type of liberals)? Should we shame them, and let the whole country know of their problems? Why is shaming bad for almost everything else, but not taxation?

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

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