Images of Kolkata's Economy
A sign reading "Pay Your Tax" sits outside the income tax office in Kolkata, India, on Monday, March 14, 2011. India faces pressure to step up its battle against price gains even after the steepest interest-rate increases among Asia's major economies, as oil costs rise and consumer demand strengthens.  Brent Lewin—Bloomberg/Getty Images

Check Out This Genius Way to Shame People into Paying Their Taxes

Apr 18, 2016

Every year the IRS loses a significant money in uncollected taxes. Last year, the figure was almost $300 billion, and the understaffed and underfunded IRS has been having a difficult time enforcing compliance.

But instead of angling for a larger staff of tax analysts to deal with the growing number of returns, the agency might consider taking a cue from India. The country has proven extremely effective in making sure people pay, by applying shame. And do it loudly, and very publicly.

When someone in the Indian city of Thane doesn't pay their taxes, the government sends an army of drummers to their do0r to shame them. According to the Wall Street Journal, the strategy works very well: When Mumbai started sending drummers after tax dodgers, tax revenue went up 20%.

“When you get a notice, you’re the only one aware of it,” Sanjeev Jaiswal, commissioner of Thane, told the Journal. “A drum band downstairs from your house changes that. Few things are as important to people as their reputation.”

Just 3% of the people in India pay taxes, due to poverty and a lingering distaste for taxes leftover from the British. But unlike the U.S., enforcement is weak.

The drummers and their security staff offer a much better solution to the simple agent at the door, the Journal writes, because the tax evaders had been known to beat up the agents. A previous tactic of simply publishing the names on a website, which has been suggested in many places before, didn't really work when Thane tried it. No one really checked the website on a regular basis, taking the tooth out of the tactic.

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If the drumming stops being an effective weapon against the tax dodgers, Jaiswal has an idea, which he's already putting in place. This year he is going to send groups of transgender women to the their doors to dance mockingly, because, according to the Journal: "Hijras are widely believed to be able to impose hexes."

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