Deborah H. Schenk (NYU) presents Salience and Tax Design at Michigan today as part of its Tax Policy Workshop Series coordinated by Reuven S. Avi-Yonah.  Here is the abstract:

This paper develops an argument for taking into account the salience of taxes as a fiscal policy tool at the federal level on political economy grounds. Most of the normative argument with respect to such taxes assumes that the intentional use of low-salience taxes by the government is undesirable. The paper makes a political economy argument for taking salience into account, specifically in cases where Congress finds it necessary to minimize the prominence of the tax because it cannot politically increase marginal tax rates. In developing the argument that salience may be an appropriate fiscal tool in some circumstances, the paper, begins by setting out the differences between transparency, complexity, and salience, which are often confused in the literature. The argument that taking into account salience is appropriate in some settings is dependent on the transparency of the political process by which the tax or provision is adopted and the degree of complexity of the provision. The paper’s argument for the use of salience differs in two ways from past literature with respect to salience. First it considers salience with respect to federal income taxes. Most commentators have explored salience in connection with consumption or commodity taxes. Furthermore it considers the salience of discrete provisions, rather than the salience of the tax itself. It concludes with a case study of the alternative minimum tax where a low-salience tax provision is justified and effective.