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K-State Today

June 10, 2016



Accounting professor Amy Hageman co-author of complex tax codes study published in journal

By Brent Fritzemeier

Amy Hageman, associate professor of accounting, co-authored a study that found when it comes to preparing taxes each year, individuals who are faced with high choice complexity are more error-prone and less likely to choose their optimal incentive.

The study titled, "Are more choices better? An Experimental Investigation of the Effects of Multiple Tax Incentives," was recently published in the Journal of the American Taxation Association.

The U.S. federal income tax system includes numerous incentives intended to encourage a variety of different behaviors for its citizens. However, these incentives add complexity to the process for the average taxpayer. This study investigates how one source of complexity — the number of different incentives — affects individuals' use of tax incentives.

The results from two experiments detect no evidence that having more, versus fewer, incentive choices — i.e., high choice complexity — affects individuals' decisions to engage in the targeted behavior or select an incentive. However, the results do show that individuals faced with high choice complexity are more likely to make errors and less likely to choose the optimal incentive.

In addition to Hageman, the study was co-authored by Donna Bobek Schmitt, University of South Carolina; Jason Chen, Idaho State University; and Yu Tian, University of Central Florida.