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Replication data for: Inertia and Overwithholding: Explaining the Prevalence of Income Tax Refunds

Version
1
Resource Type
Dataset
Creator
  • Jones, Damon
Publication Date
2012-02-01
Description
  • Abstract

    Over three-quarters of US taxpayers receive income tax refunds, which are effectively zero-interest loans to the government. Previous explanations include precautionary and/or forced savings motives. I present evidence on a third explanation: inertia. I find that following a change in tax liability, prepayments are only adjusted by 29 percent of the tax change after one year and 61 percent after three years. Adjustment increases with income and experience, and for EITC recipients, I rule out adjustment greater than 2 percent. Thus, policies affecting default-withholding rules are no longer neutral decisions, but rather, may affect consumption smoothing, particularly for low-income taxpayers. (JEL D14, H24, K34)
Availability
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Relations
  • Is supplement to
    DOI: 10.1257/pol.4.1.158 (Text)
Publications
  • Jones, Damon. “Inertia and Overwithholding: Explaining the Prevalence of Income Tax Refunds.” American Economic Journal: Economic Policy 4, no. 1 (February 2012): 158–85. https://doi.org/10.1257/pol.4.1.158.
    • ID: 10.1257/pol.4.1.158 (DOI)

Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-12-08

Jones, Damon (2012): Replication data for: Inertia and Overwithholding: Explaining the Prevalence of Income Tax Refunds. Version: 1. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E116539V1