Mastodawn

Ben Zipperer Jun 14, 2023

IRS audits of high earners are incredibly effective at raising tax revenue and reducing deficits.

New research shows that for each $1 spent on an audit of a high income individuals, the audit recovers $2 in tax revenue immediately, and then another $10 over the next 14 years as audited individuals voluntarily pay more in taxes due to deterrence effects

https://policyimpacts.org/research/67/a-welfare-analysis-of-tax-audits-across-the-income-distribution

A Welfare Analysis of Tax Audits Across the Income Distribution

Will Boning, Nathaniel Hendren, Ben Sprung-Keyser, and Ellen Stuart

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Conductor

@benzipperer Worth noting that this is likely to be an underestimate of deterrence effects, because it only estimates the individual deterrence due to being audited, but collective deterrence (increased tax compliance because you are aware others are being audited) is likely real and not measured by this methodology. (This point is made explicitly in the last paragraph of the conclusion but bears highlighting IMO)