Direct Democracy or Bureaucratic Nightmare?

March 18, 2009 3:35 PM

Why Can't We Allocate Where Our Taxes Go on Our Tax Form?

I've occasionally heard people wishing that we could just mark on our tax forms where the money will go, i.e., putting X amount of dollars to welfare, or Y amount of dollars to education, the environment, defense, etc. etc.

I understand why this might have been a logistical and computational nightmare years ago, but given the modern computerization of information, would this be an impractical or bad idea for the United States?

Has any other society or nation tried this a tax system similar to this? Has it met with any success?

posted by The ____ of Justice to law & government (16 comments total)

This is called hypothecation. The primary objection isn't logistical or computational, though - it's that we elect people to represent us in the belief (at least in theory) that they will make better allocation decisions, with access to better information, than the rest of us. Same reason we elect representatives at all, rather than do everything by referendum.
posted by game warden to the events rhino at 3:40 PM on March 18

For the same reason we don't let children pick what's for dinner. We'd get sick on cookies and ice cream. Or rather, the people who pay more taxes (the rich) would spend all the money on nice roads and law enforcement, but cut funding for the EPA, FDA and social services because they just cause trouble.
posted by Ookseer at 3:40 PM on March 18 [2 favorites has favorites]

It's an absurd idea. What you're suggesting is to remove all the (spending) power of the government. May as well not have a government.

Won't be tried, wouldn't fly if it were.
posted by pompomtom at 3:41 PM on March 18

Ultimately this won't work because our citizens lack sufficient education and/or raw intelligence to understand where their best interests lie. There are several portions of government absolutely vital to the continued survival of the country - or that are prerequisites for having a government, period - which the majority of citizens dislike or fail to understand.

Who the hell would fund the IRS? Without it, the EPA isn't going to receive your money.

The sexy parts of the government are not necessarily the critical parts.
posted by Ryvar at 3:41 PM on March 18

First problem: management of recurrent budgets which have no stability whatsoever. Pity the poor treasurers and CFOs of public service Departments!
Second problem: it'd actually be quite undemocratic. You vote for Parties and candidates on the basis of their political platforms, which have explicit and implicit financial costs and benefits. A scheme like this would hamstring their ability to carry out the progammes for which you give them a mandate.
posted by Fiasco da Gama at 3:42 PM on March 18

A more reasonable proposal I have seen is to allow people to directly allocate a small proportion of their tax dollars, much like the presidential election fund, but with more choices.
posted by grouse at 3:43 PM on March 18 [1 favorite has favorites]

It'd be great to see more money go to schools, and less to warfare. A lot of things your tax money goes to - essential things - would get no money allocated to them (relatively speaking) if it were up the American public. Some things - protection of endangered species, for instance - would end up being ridiculously over-funded, while others less fashionable, such as sewage treatment facilities - would be similarly under-funded.

Even some of the things most of us would agree are great to fund - the National Endowment for the Arts and the National Science Foundation, for example - would probably not be funded in beneficial proportion. I'd venture to say that arts might get more money than science . . . although today, the NSF gets about $47 for every $1 that the NEA gets, and it's probably science that would benefit more from increased funding.

On the other hand, I'd argue that "adoption awareness," which currently receives $1 for every $13 that "sexual abstinence education" gets is way out of wack with the desires of most sentient Americans, so that might benefit from a change. But the reality is that *any* social kind of program would see its money drastically increase, while crucial stuff like infrastructure would be even more shortchanged than it is now.

People simply lack an awareness and the energy to discover where money really needs to go. I remember seeing a poll where people were asked how they felt about non-military foreign aid, and how much of our nation's budget went towards it. Most Americans thought that the "15 - 20%" that we spent on it was far, far too much. When told that the actual percentage that our nation spends on it was less than one-half of 1%, nearly everyone changed their minds and said it was definitely far too little. This incredibly change of perception took all of four seconds. I don't want that level of cluelessness running our country. Even if our current leaders often seem pretty stupid, there are fewer of them and they're more manageable . . . plus quite a lot of them are fairly capable.
posted by Dee Xtrovert at 3:52 PM on March 18 [3 favorites has favorites]

Would you allocate your money to fund the Administrative Committee of the Federal Register? How about the Office of Thrift Supervision? The Legal Services Corporation? Nuclear Waste Technical Review Board? Bureau of Engraving and Printing?

Did you know of the existence of those agencies? Do you know what they do? Would it have occurred to you to support them?

If it wouldn't have occurred to you to support those agencies, do you believe that freedom of information, banking regulation, legal assistance for the poor, safety from nuclear waste, and currency? Do you believe you understand how much those things cost? Do you believe that all of your fellow citizens understand how much those things cost? Do you think you have accurate beliefs about how much your fellow citizens understand about government and about how they value all of the functions government performs? And do you believe that most of them are willing and able to review annually the hundreds of existing government agencies and programs and make trade-offs about their relative values?
posted by decathecting at 4:04 PM on March 18 [3 favorites has favorites]

Aside from the excellent reasons above it would instantly be gamed by special interests and ideologues. The form would break down like:

1. Border Control.
2. Abstinence Education.
3. Yellow ribbon stickers for all cars.
4. The Bush library.
5. Rush Limbaugh appreciation day celebration.

etc.

Things that havent been popularized by the parties and the media machine would be marginalized. It would be all hot-button issues. This is also why direct democracy doesnt work.
posted by damn dirty ape at 4:26 PM on March 18

In addition to the utter unworkability suggested by the answers above, there's a far simpler, non-policy reason that this is a silly idea: money is fungible.

So you say that your tax money has to be used to Save the Whales. Okay. Fine. They won't spend as much of other people's money there. Unless so much money is tied up this way that there is more money set aside for a given use than was otherwise going to be spent this would have no effect whatsoever.
posted by valkyryn at 4:52 PM on March 18

I should correct my initial comment. I think "hypothecation" refers to specific taxes being earmarked for specific purposes. Not to the general population getting to decide this.
posted by game warden to the events rhino at 5:12 PM on March 18

The idea of a democracy is that we decide collectively (via representatives) how tax revenues are to be spent.
posted by paultopia at 5:36 PM on March 18

In a non-profit I used to work for we dealt with this question a lot, with the idea being that people would donate more if they specified exactly what their money went for. The problem is no one would donate for the copier maintenence contract, while everyone would donate for the impovershed needy family. It takes unsexy infrastructure to make things work, and those allocation decisions are usually best made by the administrators of the programs.
posted by jasper411 at 6:26 PM on March 18

Sorry, money is money. Budgets control spending, not where the specific dollars come from. It would be like deciding the gas you purchase during the week is to be used only for work related transportation, and what you buy on the weekend is only for personal transportation. It is all one tank of gas. Through budgeting you can decide 60% for work, 20% for personal, but to designate particular molecules of fuel would be impossible, just like designating particular dollars.
posted by Classic Diner at 5:59 AM on March 19

The Constitution forbids this form of governance. It is explicitly the responsibility of Congress to write a budget, and decide where to spend the money available to the Federal Government.

So, aside from being illegal, it's a great idea!

Besides, I'm not sure that we'd crowdsource our way to better spending, anyway.
posted by Citrus at 8:56 AM on March 19

The idea of a democracy is that we decide collectively (via representatives) how tax revenues are to be spent.

To be clear, that's the idea of a representative democracy... The idea of a direct democracy is more like the fantasy the OP had here, and the reasons people have listed are essentially why Plato's Republic suggests democracy doesn't work, but will always degenerate into chaos. The individual citizens don't have sufficient interest or knowledge to really run things.
posted by mdn at 9:37 AM on March 19