Honesty Tax in Benefits and Admissions

Complex, lightly enforced rules create a 'tax on honesty': people who tell the truth lose out to those who fudge facts. SNAP’s 'household' rule penalizes poor roommates who share groceries unless they lie, and ancestry boxes in selective admissions invite strategic self‑identification. Policy shaped this way selects for rule‑benders, not need or merit. — If governance rewards deception, trust and fairness erode while resources and opportunities flow to the best liars rather than the intended beneficiaries.

Sources

America’s Growing Shadow Economy

Chris Pope 2025.10.08 80% relevant

The article argues expanded, means‑tested health and cash benefits create incentives to hide income (e.g., cash pay, sole‑proprietor smoothing), mirroring the 'honesty tax' dynamic where complex, lightly enforced rules reward those who misreport and penalize the straightforward.

The honesty tax

Kelsey Piper 2025.09.03 100% relevant

SNAP’s definition of 'household' that disqualifies roommates who split food costs, plus the Zohran Mamdani self‑identification example and surveys of applicants misreporting ancestry.