Situation: We all want to reduce the deficit. Republicans don’t want to raise taxes, but maybe they will if we give them something…
Proposal: Republicans are big on government accountability and fiscal responsibility, at least in principle… So what if in exchange for cutting spending and raising taxes in some ratio that is more heavily weighted toward tax increases, say 70% tax increases, mostly for wealthy people, and 30% spending cuts to entitlements, we introduce a new law, a “discretionary” taxation option. This plan, specifically pertaining to the federal income tax, would consist of the following:
80% of the income taxes collected by the IRS are collected and disbursed exactly as they are now.
20% of the income taxes collected by the IRS could be directed to a specific existing program or department, or experimental/new program, defense, education, healthcare, etc. according to the individual taxpayer’s wishes.
Is this 20% discretionary income tax (combined with higher tax rates overall) something that would be helpful in getting government to become more efficient, as programs and departments that would get less funding from taxpayers would face pressure to cut costs (in administration, overhead, etc.), while programs that were supported more, as evinced by receiving greater relative shares of this discretionary income tax, would be strengthened and possibly expanded?
*This 20% discretionary income tax allows the taxpayer to choose, but it still must be paid in full; discretionary doesn’t mean “optional,” it means “mandatory, with choice in allocation of funds.”