What taxpayers, governments and tax economists do – and what they should do.

This article provides an overview of the distinction between positive and normative economics in the context of tax economics. It explores how the study of behavioral economics and increased attention to tax evasion and enforcement complicate these distinctions. The article discusses various aspects of tax policy and government behavior, including the impact of tax cuts on corporate income, the role of behavioral biases in tax policy, and the use of notches and kinks in tax schedules. It also addresses the issue of taxpayer education and the trade-off between taxpayer privacy and tax enforcement. The author suggests that while behavioral anomalies may require some policy adjustments, the fundamental models of optimal taxation still hold. The article also explores the value of tax privacy and the potential impact of public tax disclosure on tax compliance. It discusses the effectiveness of different enforcement policies in reducing tax evasion and emphasizes the importance of tax economists behaving as scholars and prioritizing truth and accuracy in their research. The author highlights the potential bias in tax research due to data access granted by tax authorities and the need for transparency in policy recommendations. The article concludes by discussing the correlation between researchers' political views and their empirical investigations, emphasizing the importance of unbiased analysis in economics. [Extracted from the article]