What would happen if people had a say in where the tax they paid was to be allocated?

Question

I mean, a lot of the time people say 'oh, I don't want my tax money to go towards this cause, or that cause', but could you get a workable system whereby people could say what they wanted their money to go on? For example, if I didn't want any of my income tax to find it's way to the military budget, I'd be able to tick a box barring that from happening, and so on and so forth... if I didn't care where my money went, I'd just leave it open... What might be the consequences if everyone could do that?

I mean, it wouldn't have to be the whole of the tax you pay... maybe you could have control over where 50% of it went, and let the government play with the other 50%.

I mean, if this system had been in place, I don't think the millenium dome would have been built ;).

Could be tricky, couldn't it... I mean, the more you think about it, the more areas of tax allocation you find there might be. Still, it could be well worth it all the same.

Answer 1

This would cause an increase in tax rates or a lowering of the tax brackets.

The reason is simple; each department in the government has a series of objectives to achieve, and they will all compete for the tax pot. This pot gets allocated as the government deems fit. This includes everything from military spending to spending on street lights and other public utilities, police, roads, lighthouses...

By their nature, there are some expenses that can be considered essential but not everyone would be willing to pay for them such as the justice system (judges, appointed lawyers, police...), lighthouses and street lights, even the health service and civil servants, defence. Furthermore, you have to remember that people think for their own good, and often assume others will pay for some things; so the taxes we direct are unlikely to end up in that bucket.

Therefore, chances are, the amount of money allocated to these essentials would be lower than needed. Even if we could direct only 33% of the taxes, the total might not be enough for these 'essential' expenses.

So the way the government would deal with it is to increase the tax collection so that the 'essential' expenses plus some of their own pet projects are covered by the portion of taxes we have no say on.

Answer 2

One consequence would be a huge increase in advertising by government agencies and contractors. Every agency would go out of their way to convince the taxpayers that it is the one that has to get funded.

Social Security and Medicare could bet blackballed altogether, since they do not benefit the majority of current taxpayers directly.

There could also be some corruption. Payroll taxes and corporate income taxes together account for about 45% of budget receipts. So government officials and contractors for government agencies would have an incentive to bribe managers of large corporations to ensure continued funding of their agencies.

Finally, everyone would be reluctant to enter into any sort of long-term financial arrangements with the U.S. government. Say, you bought a 20-year Treasury bond last year, but this year taxpayers said the Treasury is not to pay any interest on any bonds...

Answer 3

Nothing would change as the fall in tax revenue suffered by sectors such as the military would have to be made up in higher taxes. No government would let this happen as they enjoy the power too much. How many of us would tick the box that mentions MP's pay increases?

Basically, we're all screwed, and they'll get it one way or another.

Answer 4

If people didnt pay towards a military budget, what if we were invaded? What about hospitals etc in rural remote areas? Not many people would want to pay for them, but they are still important. The system is unworkable. The solution is to vote for someone in an election that would do what you wanted!

Answer 5

Well my sophomoric answer is to say the Feds are the "umbrella," set up wisely so to protect all 50 states and that includes the military, like it or not.
If there was no strong military...kiss your freedom goodbye. Might as well live in Rowanda. It's not perfect but the best to be had anywhere...what is the altenative?

Answer 6

if by people you mean an entire country then you would have everyone saying different things and it would be unworkable, that it is the reason we have a democracy because it aims to focus the views of the public into one place where they can be discussed. The system is hypothetically flawless, in a way our body works the same way with the body having functions to secrete "funds" to the rest of our body, notably the brain, but is let down by human involvement. ****.

Answer 7

I thouht that's what voting was, the parties' main policis tend to focus on how our taxes are spent.

If it were the case that you could tick a box on your pay slip to say where it goes we would have no education as most of the big tax payers tend to put their children in private schools.

You could kiss goodbye to health care too as bupa would be cheaper

Answer 8

I think then it would be a real democracy. People have to be able to allocate the tax money, the government is their agent (It is from theory by the way). You have to be able to vote out your govt if it doesnt allocate your money properly, the problem is you never know ex-ante what the govt is gonna do with your money, they all seeem so good during the elections.

Answer 9

It would go to where ppl wanted it to go most, which migth not necessarilly be the best place. But I don't think they could prrove it either way they'd just say that's ok, dear, we'll put your taxes towards the NHS then go and spend it all on guns!

Answer 10

I would certainly stop all payments to or on behaff MPs until they looked after their constituents instead of being bullied into following the party line.I would also ban all so called information gathering overseas trips AND if they wanted security THEY paid for it out of their inflated salaries--Margaret Beckett springs to mind!