Cass R. Sunstein, Columnist

Nudging Taxpayers to Do the Right Thing

An exploration of creative ways to coax delinquent taxpayers into forking over their fair share of the tax bill -- using the tools of behavioral science.

April 15, 2014 at 10:33 AM UTC

By Cass R. Sunstein

Cass R. Sunstein is a former Bloomberg Opinion columnist. He is the author of “The Cost-Benefit Revolution” and a co-author of “Nudge: Improving Decisions About Health, Wealth and Happiness.”

Will you or won't you? That is the question. Photographer: David Paul Morris/Bloomberg

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Most Americans comply with the tax laws, but every year many of our fellow citizens don't. The result is the "tax gap" -- the amount of revenue that the government loses because people are cheating. In one recent year, for example, the tax gap was $450 billion. That's a lot of money -- more than 10 times the budget of the State Department.

What can be done to increase compliance? Remarkably, a short letter to delinquent taxpayers -- based on the findings of behavioral science -- can have large effects. And the central lesson is simple: When tax delinquents are told that most people pay their taxes on time, they are far more likely to pay up. It's a nudge that can really work.