Status-based taxation: A proposal to increase tax revenue collection

  • Blog Post Date 31 March, 2012
  • IGC Research on India
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Raj Chetty

Harvard University

This project explores whether concerns for social status can be exploited as a 'carrot' to encourage tax compliance and increase tax revenue collection in developing countries. The central idea is to exploit social rather than economic incentives to increase tax payments. The motivation for the project is that many individuals in developing countries are concerned about their peers’ perceptions (that is, their social status). These individuals currently achieve status by consuming status goods such as large house or lavish weddings.

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