The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule

Last registered on January 27, 2021

View Trial History

Pre-Trial

Trial Information

General Information

Title

The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule

RCT ID

AEARCTR-0007069

Initial registration date

January 27, 2021

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

January 27, 2021, 5:12 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

United States of America

Region

Primary Investigator

Name

Zachary Liscow

Affiliation

Yale University

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Edward Fox

PI Affiliation

University of Michigan

Contact Investigator

Additional Trial Information

Status

In development

Start date

2021-01-28

End date

2022-02-08

Keywords

Other, Welfare

Additional Keywords

taxation, behavioral economics

JEL code(s)

Secondary IDs

Abstract

The realization rule is central to income tax law, but often decreases the efficiency, equity, and simplicity of the system. Given these problems, it is surprising that we do not have a good explanation for why the rule exists for liquid assets. Scholars have long speculated about the role of the public’s views here, but little is known empirically about them. We conduct the first survey experiment to understand the psychology of taxing gains on unsold assets.

External Link(s)

Registration Citation

Citation

Fox, Edward and Zachary Liscow. 2021. "The Psychology of Taxing Capital Income: Evidence from a Survey Experiment on the Realization Rule." AEA RCT Registry. January 27. https://doi.org/10.1257/rct.7069-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2021-01-28

Intervention End Date

2021-02-12

Primary Outcomes

Primary Outcomes (end points)

Support for taxing gains when they occur, rather than upon sale, including various permutations and various assets.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

There are eight treatment arms, as well as randomized orderings and question inclusions within the arms. Each arm has a different information treatment at the beginning.

Experimental Design Details

Randomization Method

Qualtrics randomizes the treatment.

Randomization Unit

Individual.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

5000 individuals online plus roughly 100 individuals in-class

Sample size: planned number of observations

5000 individuals online plus roughly 100 individuals in-class

Sample size (or number of clusters) by treatment arms

1000 control, 1000 both-sides treatment, 500 pro tax policy treatment, 500 anti tax policy treatment, 500 anti-status quo treatment, 500 mental accounting treatment, 500 responding to objections treatment, roughly 100 in-class students

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB