What if each tax payer in the United States was required to pay a $20.00 tax that he could allocate to any number of projects in denominations as small as 25 cents. Or as large as the full $20.00 to one project. These projects could be literaly anything they chose from an approved list. Medical research, technical research, art, wildlife preservation, anything. The list might have 10 categories with 100 under each category.
Could something like this have an impact on life in America that we would actually be aware of it in our daily lives. Would we as a country become better aware of each others priorities?
Probably true. But it would get people far more interested in tax and spending issues.
Maybe a simple Form 1040 line saying, “Earmark $100 - no more, no less - to a governmental program of your choice.”
Its effect would probably be minimal. Government revenue is essentially fungible. Congress decides how much each federal program should get. So let’s say Congress decided to give the NSA forty billion dollars and the CDC seven billion dollars.
Then the tax payers have their input. I’ll assume, for the sake of argument, that there are three hundred million tax payers. And due to the Ebola scare they all want to give twenty dollars to the CDC. This adds up to six billion dollars. Congress throws in another billion out of general revenue and the CDC has the exact same amount Congress would have given it anyway. And the NSA gets their forty billion dollars even though no tax payers directed any money to them.
We see a real world example of this with state lotteries. They’re usually advertised as supporting public education. But the schools don’t get any more money just because people buy a lot of lottery tickets. The state legislature sets a budget for public education and all of the lottery money is applied to it and then other tax money supplies the rest. If the legislature had just put the lottery money into the general pile with the rest of its revenues, the school budget would have been exactly the same.
I think t would be a very important source of data with strong indications of how strong people feel about something. If I thought something was worthwhile I might allocate $1.00. If I thought something was very important I might allcocate $10.00. I believe the data gathered would be at least as valuable as the money collected.
Nothing would be accomplisd since all the government departments would have a very unsteady and unpredictable source of revenue. How could directors make plans for different projects when the revenue could change on a whim?
I predict that the Federal Department of Porn would receive a windfall. But seriously, it would be allocated in a manner that most would find frivolous, in a manner proportionate but not identical to how they feel about congress’ choices. That is a comment on human nature, not the American taxpayer.
Also, 1000 different choices? Even if all were similar, that is too much choice to comprehend. I have enough trouble deciding who to give to on Amazon Smile. The above said, the Humble Bundle seems to work pretty well. You can choose a purchase price of any amount, then allocate percentages to various groups.
Federal taxes currently have a check box where you can allocate $3 to the election fund and your choice has zero direct effect on the amount of tax you pay. I see that even then only 6-11% (according to a few sources) of people decide to offer not-their-money up.
Out of all the problems already mentioned, giving an extra $20 to the government to fund your projects is much more inefficient than simply giving it to a number of existing charities or non-profits.
Additionally, forcing people to pay an extra $20 will not make them more involved in making decisions about allocating money. Most people simply will not make the choice. Just like many homeowners won’t fill out a form for a tax abatement, many tax payers will ignore whatever form you come up with that would require them to allocate their measly $20.
Finally, a version of this idea already exists in many communities. NYC has something similar to this idea called “Participatory Budgeting”:
This is better than the OP’s idea because residents get to propose projects, while the OP has them allocating $20 to a list of pre-approved ideas.
It’s been around since 2011, and I haven’t noticed anything life changing yet. My personal theory for the small impact is because the average citizen thinks “we shouldn’t be spending so much money on X” is a brilliant budgeting decision and hasn’t given it much further thought. The actual process of allocating tax dollars is a tedious and difficult process that few people are willing to get involved with. The number of people that show up for NYC’s “participating budget” meetings are minimal, and their ideas are not much better than their elected politicians.
The California state tax return has (or had, for many years) a set of boxes you could check to donate $1.00 to various programs. It was simple and work(s)(ed) fairly well.
OTOH, most towns in Connecticut set their own budget and property tax rate, with at least some say in the budget structure. That works pretty well, too.