Taxing Nudges - COVID-19 Lockdowns: Birds Singing, Flamingoes Flocking, Dolphins Dancing, Cleaner Air and Water

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Kathleen DeLaney Thomas (North Carolina), Taxing Nudges, 106 Va. L. Rev. ___ (2020):

Governments are increasingly turning to behavioral economics to inform policy design in areas like health care, the environment, and financial decision-making. Research shows that small behavioral interventions, referred to as “nudges,” often produce significant responses at a low cost. The theory behind nudges is that, rather than mandating certain behaviors or providing costly economic subsidies, modest initiatives may “nudge” individuals to choose desirable outcomes by appealing to their behavioral preferences. For example, automatically enrolling workers into savings plans as a default rather than requiring them to actively sign up has dramatically increased enrollment in such plans. Similarly, allowing individuals to earn “wellness points” from attendance at a gym, redeemable at various retail establishments, may improve exercise habits.

A successful nudge should make a desired choice as simple and painless as possible. Yet one source of friction may counteract an otherwise well-designed nudge: taxation. Under current tax laws, certain incentives designed to nudge behavior are treated as taxable income. At best, people are ignorant of taxes on nudges, an outcome that is not good for the tax system. At worst, taxes on nudges may actively deter people from participating in programs with worthy policy goals. To date, policymakers have generally failed to account for this potential obstacle in designing nudges.

COVID-19 Lockdowns: Birds Singing, Flamingoes Flocking, Dolphins Dancing, Cleaner Air and Water

COVID-19 lockdowns have cratered the economy; meanwhile, we can hear birds sing, and air and water are cleaner, from Venice to Kolkata.

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Nazism, socialism and the falsification of history

The five part test companies need to pass on tax havens to get a bailout

Posted on May 4 2020

Some fairly simplistic calls for the government to not give bailouts to companies using tax havens are continuing. I wholly understand the sentiments but the
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