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Great Minds Think...Somewhat Differently

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Ethan Porter writes,


Staunch environmentalist? Send some money to the EPA. Believe we need an infrastructure upgrade? Direct your funds to the Department of Transportation. Think we need to ramp up our national defense? Send extra tax dollars to the security agency of your choosing. To ensure precision, this would have to work on the agency and department level. Information about destinations-their duties, and objective evaluations of their performance-would be available online, on one website. Think of it as a form of citizens' earmarks, designed to make use of modern technology and wrest a bit of power for the people themselves.

I propose a very similar idea in the widely-unread Unchecked and Unbalanced. However, there is an important difference. I view self-allocated taxes as a substitute for some of the taxes that people now pay. Ethan Porter views self-allocated taxes as additional donations that people would make. Porter thinks that if we knew how government was spending money, we would be very happy with paying taxes. I think if we knew how government was spending money, we would prefer to donate our money to other causes.

The way I look at it, there are two ways that people donate to causes. The first way is when they make individual charitable donations. The second way is when a tiny group of legislators tells forces people to donate to the causes selected by those legislators.

I like Porter's proposal, because I would like to see people think in terms of directly comparing the act of individually donating to a cause with the act of being coerced to donate to the causes of legislators. Porter thinks that this would increase the public's support of legislative causes, making people more pro-government. I think it would increase the public's awareness of how much they prefer making their own donations to legislative coercion.


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CATEGORIES: Political Economy




COMMENTS (6 to date)
Joshua Johnson writes:

Greece is actually trying this on a national level to fund their debt obligations.

http://www.bankofgreece.gr/Pages/en/other/publicdebt.aspx

Arthur_500 writes:

Alas I have to take exception with this idea. I am certainly more inclined towards anarchy than Big Brother so the idea that we support that which is important to us is very appealing. However, people are lazy, greedy and self-serving.

I know this is not what they normally say in an economics class but it is the basis of economic study. How do people react in the face of scarcity?

The most successful programs appeal to greed such as tax incentives that promote certain behavior so the taxpayer pays less. Our means of taking payrol taxes throughout the year is successful because most people are too lazy to save the money throughout the year and it increases participation in the tax revenue program.

We have seen studies that clearly show that if I can voluntarily contribute then I stand aside and let other contribute, unless it gives me that real warm fuzzy feeling.

People won't contribute and people won't participate in understanding government. We are too lazy and emotional. We like the idea of a representative form of government because we have neither the time nor the interest to participate. We complain about our elected officials and then re-elect them because we are too lazy to investigate the options. We only throw them out when there is some sort of emotional issue.

Finally, the decline of any democracy (which is essentially what this payment contribution is) is doomed to failure due to laziness and emotions. I regret to conclude that our mediocre representative republic is probably the best form of government for the masses as it allows input but doesn't fail due to the laziness and ignorance and emotional swings of the masses.

Doc Merlin writes:

"However, people are lazy, greedy and self-serving"

I read that as, "people are efficient, optimizing, and self interested."

topgun writes:

" The second way is when a tiny group of legislators tells forces people to donate to the causes selected by those legislators."

True enough. But we choose those legislators. We give money to those legislators (via campaign contributions). We also have the power to be one of those legislators, if we so choose. So, we do have considerable control over the causes they spend money on. I can understand the impulse to continuously dump on our representative system of government given the current state of affairs. But remember, its our relative apathy and indifference which is also to blame. I have to second Arthur_500's reasoning. If we are so indifferent now, why would having a more direct form of democracy change that?

Nick writes:

"I propose a very similar idea in the widely-unread Unchecked and Unbalanced. However, there is an important difference. I view self-allocated taxes as a substitute for some of the taxes that people now pay."

I too had come to the conclusion some years ago this might be a far better (or more democratic) system of allocating resources. I don't know exactly how feasible such a thing would be, however its piqued my interest that someone else would also consider this idea. I will be buying your book.

dlr writes:

This would work great!

Step 1) Your total taxes are determined as per the usual method whatever it was.

Step 2) You get to allocate them as you saw fit across government programs.

Step 3) No cheating. Each person/business allocates 100% of their own tax dollars, so there are no tax dollars for the politicians to allocate.

Step 4) If you wish you could donate more than 'your fair share'.

I LOVE this. We would have to phase it in gradually of course, say 10% a year, but what a great deal.

This would make paying taxes actually fun. Although I do think that on the website where you choose the programs you want to support, they should show the current level of contributions that have already been made to date, (to protect against over funding of popular items), along with, of course, how much money the department spent last year, and all the great things it would do if it was given more money this year.

This is such a great idea. Would you allow advertising? Just think, competitive ad campaigns trying to persuade you to spend your tax dollars helping to invading Iraq or Afghanistan.

The only thing that would make this more perfect would be if you could choose how much of your taxes went to state, local or federal government. I bet there would be a BIG shift of dollars towards local and state.

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