Sawyer, A.J. (2010). Enhancing Compliance through Improved Readability: Evidence from New Zealand’s Rewrite “Experiment”. In Selected Papers Given at the 2010 IRS Research Conference (pp. 221-254).
Sawyer, A.
2010
Sawyer, A.J. (2010). Enhancing Compliance through Improved Readability: Evidence from New Zealand’s Rewrite “Experiment”. In Selected Papers Given at the 2010 IRS Research Conference (pp. 221-254).
New Zealand recently completed a rewrite of its Income Tax Act (ITA), a project initiated on the basis of reducing complexity through drafting more readable legislation. It is now appropriate to assess the extent to which this goal has been achieved. The rewrite project was undertaken in an iterative manner, incorporating four major steps (and creating three new complete versions of the ITA), enabling researchers to assess the achievements of each stage by utilizing readability measures as proxies for understandability. This paper builds upon earlier research that primarily uses Flesch and associated formulae through adopting the Cloze Procedure as the basis to test the readability of various versions of the ITA on undergraduate tax students (termed ‘tax novices’). The results suggest modest improvements in readability although most subjects failed to achieve the basic instructional level, suggesting caution in the optimism emerging from prior research. Future research is needed to assess readability using tax practitioners as ‘tax experts’.
Overall it appears that the student subjects found the ITA 2004 version of the four sections easiest to understand as measured by the level of correct responses in filling in the gaps. The ITA 2007, the final version of the rewritten legislation, came in a close third behind the ITA 1976 (the pre-rewritten version)! As noted earlier, the number of observations for the advanced tax class makes significance testing comparison between classes unsuitable. All four versions of the ITA in NZ scored higher than the ITAA 1936, with the ITA 2004 exceeding the ITAA 1997. The results suggest modest improvements in readability, although most subjects failed to achieve the basic instructional level, suggesting caution in the optimism emerging from prior research. Future research is needed to assess readability using tax practitioners as tax experts.
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