What If We Had Tax Choice?

EspañolHere’s a crazy idea. What if we could choose where our tax money goes? Bear with me, this might actually make sense.

Every year the government of the United States is supposed to pass a budget. The budget is the plan for how government will spend its (our) money and how they will make up any shortfalls (deficits), if there are any. Within the thousands of pages of the budget are appropriations for defense, Medicare, and Social Security — along with thousands of other government programs large and small.

Tea Party conservatives and Christian conservatives have long complained that they did not want their tax money to go to programs like the National Endowment for the Arts and organizations like Planned Parenthood. Democrats complain about other programs, such as military contractors, that don’t match their desires, or they want more money for social programs.

The constant battles over where to put our US$3 trillion in annual spending is a regular part of the political season each year — although for most of the last few years it has ended in a continuing resolution which means they keep spending officially along the lines of the previous year’s budget levels. I suspect the reason the government has chosen not to pass a budget is so they can hide exactly what they are spending money on, but maybe that’s just me.

What if we changed the law so that half the budget was dedicated to must-fund programs like defense and Social Security and then gave the people a choice as to which other programs to fund individually? (We could also require the money going into Social Security be kept for social security instead of being dropped into the general fund.)

Each year about this time the federal government runs a program called the “Combined Federal Campaign.” It is a combination of all the charity organizations in the United States, and each federal government employee gets to choose which one to contribute to or not at all. A brochure is published and an election form is handed out. Employees decide which programs to fund and they can elect not to fund any at all. The idea would be to apply this same kind of system to half of the federal budget and allow all taxpayers to choose what to fund with half of their tax money. The system could be operated electronically to save on paper and dollars, but basically my idea would follow this same path.

Each year, around budget time, the government would open up a website with a list of all government programs that are asking for funding. How much they want and how close they are to their goal. Then each individual taxpayer would choose where his tax money would go — to what programs. They could also select which programs not to fund. Programs not funded would be closed or forced to cut back to match their actual funding.

That way, Christians can prohibit any of their tax money to go to Planned Parenthood and Democrats can choose to give more money to Planned Parenthood. When it comes to social programs I would also include the right for each individual taxpayer to spend money on charity groups instead of government provided programs.

The combination of tax choice and program choice would cause immediate impact on the way the federal government does business. First, programs that don’t work or are not justified would go away. So much for pork in the budget. Second, those who feel strongly about a program, for or against, would have the right to vote immediately with their dollars.

So those programs that aren’t working would have to make changes quickly to better serve the interests of the people, or they would disappear. Healthy competition between private sector programs and private charities and the government would also make social programs more effective, since instead of being an agency that hides behind tons of red tape, they would suddenly be an agency that lives or dies based on how well they serve their customer.

Tax choice wouldn’t cost much to maintain or update since the entire system would be done electronically. Funding would be automatic based on the individual choices of the taxpayers. Those who think we should spend more on social programs could fund them to their hearts’ content. Taxpayers should also have the option of sending more money than they owe to fund certain programs.

I would also include in this system a direct voting system, allowing voters to directly approve or disapprove any budget deficit or increase in our credit limit. Remember, under this idea the taxpayer would control half of the budget. Congress would control the other half. Regardless of whether congress approves a budget or not, the choices made by taxpayers would take effect immediately. The opportunity to make the choices would only happen once a year so as to avoid too many midyear changes.

Those who don’t participate would have their tax dollars dropped into the general fund and divided up among all programs.

I can only envision one major problem with this system. If you don’t pay taxes, you don’t get to assign any money. Something tells me that would be the most unpopular part of this system. So what do you think? Would you like the opportunity to choose where your tax money goes?

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