Research Insights: Do Tax Amnesties Really Work?
A behaviorally informed notice can increase the effectiveness of tax amnesties. In Santa Fe, Argentina, notices of a tax amnesty were redesigned and tested against old and more complicated notices. A simpler notice decreased the cognitive cost of understanding it, which in turn increased the probability of joining the tax amnesty and the amount collected by the city. The downside of joining a tax amnesty is that people procrastinate on their own compliance and may set a bad example for their neighbors.