Tax Choice

[Xerographica]

The reason I joined this forum was to participate in a thread dedicated to one of my favorite topics...tax choice. My participation joy was short lived though because it turns out that I'm a "gravedigger"*. So the thread was locked...but I was invited to start a new thread on the topic.

For those not familiar with the concept...tax choice is basically where taxpayers are given the opportunity to choose where their taxes go. I've also labeled this concept "pragmatarianism" because if you google tax choice you'll mostly find irrelevant results.

Here's how it would work. At anytime throughout the year you could visit the website of a government organization...say the EPA...and directly submit a tax payment. You'd keep your receipt and submit it when you filed your taxes.

Taxpayers would still have the option to just give their taxes to congress. Perhaps they would even have the option to give their taxes to individual congresspeople. But if they weren't happy with the spending decisions of their "personal shoppers" then they would have the opportunity to directly allocate their taxes themselves.

By far the most common objection to tax choice is the issue of information. Critics say that it would be impossible for millions of taxpayers to coordinate their spending decisions...so we'd end up with too much of one public good and not enough of another. Yet, we don't coordinate our purchases in the private sector...so why would we be expected to coordinate our purchases in the public sector?

Another common objection has to do with people being idiots. The thing is..."idiots" generally don't make that much money...so they wouldn't be allocating the large bulk of taxes. The flip side to this objection is that the rich would control how taxes were distributed. But who controls the rich? Consumers. If you weren't happy with how Jeff Bezos was allocating his taxes...then you would certainly have the option to boycott Amazon and encourage others to do the same.

But what is the benefit of tax choice? Well...we'd be incorporating the perspectives of our most productive citizens into the distribution of public funds. Do their perspectives matter? Consider what would happen if we removed their perspectives from the private sector. The opposite of that would happen once we added their perspectives to the public sector.

*The "gravedigger" concept doesn't make any sense. If the original posters are no longer active...then the thread will die on its own. If new posters start participating then why close an active thread?

[Norstal]

By far the most common objection to tax choice is the issue of information. Critics say that it would be impossible for millions of taxpayers to coordinate their spending decisions...so we'd end up with too much of one public good and not enough of another. Yet, we don't coordinate our purchases in the private sector...so why would we be expected to coordinate our purchases in the public sector?

Errr...what? Government services aren't like public sector services. I don't pay the police to protect me for one. I pay taxes that would fund the police. You're comparing apples to oranges.

I swear if this is another one of those "free market solves everything" thread, I'm not going to post anymore.

Another common objection has to do with people being idiots. The thing is..."idiots" generally don't make that much money...so they wouldn't be allocating the large bulk of taxes. The flip side to this objection is that the rich would control how taxes were distributed. But who controls the rich? Consumers. If you weren't happy with how Jeff Bezos was allocating his taxes...then you would certainly have the option to boycott Amazon and encourage others to do the same.

Like boycotts work. I'm guessing you have no idea how businesses work.

Consumer loyalty works much better than targeting the average people. We could use the Chic-Fil-A fiasco as an example. You say people don't like their company, they can just boycott them. Days after the boycott is announced, a whole slew of loyal customers went to purchase their service. So as long as there are loyal customers, no matter how few, the company will always survive. The same concept works with companies like Apple. No matter the amount of controversies they have, they're still raking in profits.

[Tubbsalot]

Yet, we don't coordinate our purchases in the private sector...so why would we be expected to coordinate our purchases in the public sector?

Because when you purchase from the private sector, you purchase for yourself, or a close friend, or potentially an organisation you represent. There's no need to coordinate the purchases because they are coordinated pretty much ideally by the individuals making those purchases.

But when you "purchase" in the public sector (and the way you've described it, it's clearly more analogous to a donation than a purchase), you're doing it for someone else entirely. How do you know whether Bob Jimbub of Nantucket wants your four bucks for his local police force? More relevantly, how do you know whether the indistinct mass of humanity represented in a national tax base will be ideally served by your directing four bucks to security forces?

Another common objection has to do with people being idiots. The thing is..."idiots" generally don't make that much money...so they wouldn't be allocating the large bulk of taxes. The flip side to this objection is that the rich would control how taxes were distributed. But who controls the rich? Consumers. If you weren't happy with how Jeff Bezos was allocating his taxes...then you would certainly have the option to boycott Amazon and encourage others to do the same.

- idiots regularly make enormous amounts of money, or worse, intelligent criminals
- boycotts don't work except in the most extreme cases, and you're not going to get that just because Gill Bates pointed his taxes to education instead of public transport

But one thing is right - the rich would largely control the allocation of tax revenue. In which case, you have to ask, why bother with tax revenue in the first place? Why not just let everyone spend their money as they like?

(The answer is, of course, that such a suggestion is batshit insane.)

But what is the benefit of tax choice? Well...we'd be incorporating the perspectives of our most productive citizens into the distribution of public funds. Do their perspectives matter?

No.

In fact we should ignore their perspectives more than most peoples', because they tend to be whiny fuckers. "I don't like that you're taking my money to save lives!" "Go fuck yourself."

*The "gravedigger" concept doesn't make any sense. If the original posters are no longer active...then the thread will die on its own. If new posters start participating then why close an active thread?

Well, my favoured explanation is that if you just keep gravedigging existing threads, you end up with a few threads each with over a million posts, where no-one can ever be bothered reading through and no clear idea is ever present.

Also pretty much every forum has rules on gravedigging.

[L Ron Cupboard]

Things like services for people with disabilities or mental health problems, social work, probation, and lots of other vital things would never get any tax funding simply because they are things people do not like to think about unless they affect them personally.

[Laerod]

*The "gravedigger" concept doesn't make any sense. If the original posters are no longer active...then the thread will die on its own. If new posters start participating then why close an active thread?

The thread is dead. If you have to revive it, it's not an active thread. People will end up replying to posts made in the beginning that no one remembers making anymore, or that were possibly made by nations that ceased to exist. Starting a new thread is a better solution.

[Veblenia]

The reason I joined this forum was to participate in a thread dedicated to one of my favorite topics...tax choice. My participation joy was short lived though because it turns out that I'm a "gravedigger"*. So the thread was locked...but I was invited to start a new thread on the topic.

For those not familiar with the concept...tax choice is basically where taxpayers are given the opportunity to choose where their taxes go. I've also labeled this concept "pragmatarianism" because if you google tax choice you'll mostly find irrelevant results.

Here's how it would work. At anytime throughout the year you could visit the website of a government organization...say the EPA...and directly submit a tax payment. You'd keep your receipt and submit it when you filed your taxes.

Taxpayers would still have the option to just give their taxes to congress. Perhaps they would even have the option to give their taxes to individual congresspeople. But if they weren't happy with the spending decisions of their "personal shoppers" then they would have the opportunity to directly allocate their taxes themselves.

This is an awful idea, that will no doubt result in the growth of PR departments and advertising budgets for government branches as they compete for taxpayer dollars. The net result would be a general diversion of funds away from fulfilling departmental mandates. And giving people the option to let individual Congresspeople spend your tax dollars for you? That's an invitation to kickbacks and pork barrel politics. This plan would facilitate corruption and waste on a grand scale.

I can also see where letting people pay bits and pieces of their taxes whenever would rob large, expensive programs of funding stability regardless of whether they were able to make their budget. Tax commitments dry up in December because of Christmas shopping? Tough luck, Pentagon; you'll just have to mothball that war until March when consumers have caught up with their Visa bills.

Another common objection has to do with people being idiots. The thing is..."idiots" generally don't make that much money...so they wouldn't be allocating the large bulk of taxes.

That's, frankly, classist bullshit.

The flip side to this objection is that the rich would control how taxes were distributed. But who controls the rich? Consumers. If you weren't happy with how Jeff Bezos was allocating his taxes...then you would certainly have the option to boycott Amazon and encourage others to do the same.

Yes, because comsumer boycotts have to date fixed all the problems of corporate misbehaviour. Oh, wait...
Nor, to follow your Jeff Bezos example, do I think you've stopped to wonder how many of Amazon's customers live in different tax jurisdictions than Bezos.

[Not Safe For Work]

The reason I joined this forum was to participate in a thread dedicated to one of my favorite topics...tax choice. My participation joy was short lived though because it turns out that I'm a "gravedigger"*. So the thread was locked...but I was invited to start a new thread on the topic.

For those not familiar with the concept...tax choice is basically where taxpayers are given the opportunity to choose where their taxes go.

Terrible idea.

Five minutes talking to a cross-section of the population tells you why this is a horrible idea.

The only thing that makes our democratic even remotely possible, is the fact that individual prejudices are drowned-out by the acquiescence of the majority.

[Xerographica]

Norstal, In a pragmatarian system...you wouldn't pay the police to protect just you...you'd pay the police because 1. you have to pay taxes anyways, 2. crime is your biggest concern and 3. you feel that the police are the best way of dealing with crime.

Are you correct that the police are the best way to deal with crime? Maybe...maybe not. Perhaps funding after school programs for disadvantaged youth is the best way. Isn't an ounce of prevention worth two of cure? There's certainly more than one way to skin a cat. Giving people the opportunity to directly allocates their taxes incorporates their unique perspectives into finding solutions to problems our country faces.

The point is...economics works when millions of people are given the opportunity to respond to shortages of the things that they value. This is how the private sector works...including the non-profit sector...and this is certainly how the public sector should work as well. Otherwise, we end up with wasted resources. There's just no way that congresspeople can know how much police protection you would be willing to forgo for more public education. Without that information they have no idea how much money they should allocate to each of the government organizations.

Regarding Chick-fil-A...you're using this as an example that boycotts aren't effective? Of course boycotts aren't ALWAYS going to work. That would be ridiculous if they always worked. For them to work you need enough customers to boycott in order to make a large enough dent in the company's profits.

The point is...if you disagree with Chick-fil-A's policies...at least you have the option not to purchase their products. With the current system...you don't have a choice whether your taxes fund public "goods" that you are ethically against. In a pragmatarian system...you'd have the freedom to withhold your taxes from say...war...and you'd also have the freedom to boycott the company's of any wealthy people that supported war with their taxes.

[Free Soviets]

There's just no way that congresspeople can know how much police protection you would be willing to forgo for more public education. Without that information they have no idea how much money they should allocate to each of the government organizations.

under your idea, there's no way for people to know how much police protection they will be getting. they are not voting on a budget. they are hoping other people will also chip in for police protection rather than, say, the department of harassing abortion providers. which is to say, all you've done is turned the entire government into one giant free rider problem. this is funny, since, you know, the government is precisely the organization that can help us get around those.

[Typhlochactas]

Obviously this wouldn't work on a large scale, but what if you could choose where 5% of your tax money went, or another small percent?

[Xerographica]

Tubbsalot, in the private sector you spend money in response to a shortage of something you value. If you buy food...it's because your stomach is growling. If you donate to a charity...it's because you perceive a shortage of something that the charity can address.

In a pragmatarian system, why would somebody allocate their taxes to the police? Clearly they are concerned about crime. If, after giving their taxes to the police, they were still concerned about crime then they would encourage their friends and family to allocate their taxes to the police.

The supply of public goods should be determined by the demand for public goods. It's really as simple as that.

Sure, there are idiots and criminals that make a lot of money...but they are hardly the rule. What's an "idiot" going to spend his taxes on anyways? Are all the idiots going to spend their taxes on the same thing? Are all the idiots going to agree that public healthcare is important? Maybe all the idiots are liberals? Or perhaps all the idiots are conservatives?

What about the rich...are they all conservatives? What would they spend all their taxes on? What do you spend all your money on? Do you spend all your money buying just one thing? Are you a stereotype...or are just "other" people stereotypes?

Regarding gravedigging...so the forums would be swamped with old threads? And nobody would think to start a new one? Members are perfectly capable of starting new threads...if they didn't start new threads...then that would mean that they were perfectly happy participating in old threads.

[Xerographica]

Things like services for people with disabilities or mental health problems, social work, probation, and lots of other vital things would never get any tax funding simply because they are things people do not like to think about unless they affect them personally.

That's kinda true...my gf is a mental health therapist for disadvantaged kids...and I've long since communicated that I have absolutely no desire to hear her horror stories. Would people give their taxes to her organization though? Well...just because I don't want to hear her horror stories doesn't mean that our friends and I wouldn't derive utility from paying a portion of our taxes to her organization.

That being said, her other horror stories (at least from my perspective) include stories of other therapists padding their hours. Is hers the only government funded organization that engages in fraudulent billing practices? Hardly. In a pragmatarian system...taxpayers would be able to withhold their taxes from the worst offenders.

[Jinos]

The most important thing to remember when it comes to "Tax Choice" ideas is that they're largely irrelevant.

If you say "my money will go here instead of there" it doesn't stop 'there' from being funded, it just means someone else's money went to it. And really, all Tax Choice is doing is giving a more visible way for people to 'pretend' they're not funding something they don't like. But in reality, government treats all tax money like a pool, so it doesn't really matter where you 'say' your money is going, since the government will treat it the same either way.

Either that, or this 'Tax choice' proposal actual gets the power to defund things by popular vote. Which is a DISASTROUS policy. Ballot box budgeting does not work in California, nor will it work for the rest of America.

[Person012345]

Tax choice wouldn't work. People are too stupid.

[Xathranaar]

I'd actually like to see this done, somewhere, just to see how it plays out. It would be an interesting experiment.

Just not here.

[Ifreann]

The fuck is the point of electing a government if you're not going to let them spend money on their own?

[Veblenia]

The fuck is the point of electing a government if you're not going to let them spend money on their own?

So you have someone to blame when this scheme goes catastrophically wrong, of course.

[Xerographica]

Veblenia, so government organizations would be forced to compete for our taxes??? *gasp* THE HORROR. They'd be forced to share information with us in order to remind us why they are important? *gasp* THE HUMANITY.

Pragmatarianism would facilitate corruption? Let's say that one person...a king...controlled the power of the purse. Would this facilitate corruption? Perhaps it's not such a good idea to have all your eggs in one basket. Then what? Well...you give the power of the purse to congress. So then you have 538 congresspeople controlling 1/4 of our nation's revenue. So what if you want to corrupt the government? Oh, it's easy...you just have to go to the one place where power is consolidated...Washington DC.

In a pragmatarian system...there would be millions and millions of taxpayers all over the country. Good luck if you wanted to corrupt them. You'd have to do what everybody else does...buy commercials to convince them to allocate their taxes to your cause.

Decentralizing power is the solution to corruption. And allowing taxpayers to choose which government organizations received their taxes would effectively combat waste. Nobody wants their hard earned money to be wasted.

Regarding funding stability...if your large expensive programs were underfunded...and nobody noticed...do your programs matter? If they do matter...then why didn't the taxpayers use their visas and mastercards to pay their taxes? It's ok for the nation to go into debt to pay for all the public goods that voters want...so why not let individual taxpayers go into debt to pay for the public goods that they value?

The bottom line is...the government should do no more...and no less...than taxpayers are willing to pay it to do.

[Ifreann]

Veblenia, so government organizations would be forced to compete for our taxes??? *gasp* THE HORROR.

Yes. They should be cooperating.

[Yewhohohopia]

The problem is that most people have no fucking idea how much everything costs. The other problem is how to organise deficit spending and the raising of new government capital.

[Mavorpen]

Veblenia, so government organizations would be forced to compete for our taxes??? *gasp* THE HORROR. They'd be forced to share information with us in order to remind us why they are important? *gasp* THE HUMANITY.

Or the people can stop being fucking idiots and learn.

The bottom line is...the government should do no more...and no less...than taxpayers are willing to pay it to do.

Until the people are smart enough to make these decisions themselves or until certain very important things are recognized as permanent rights that can never be taken away, no.

[Trotskylvania]

It would result in a computational disaster of the highest order. People making decisions in a vacuum about where their money should go for social priorities is doomed to fail no matter how intelligent the people are. That is why the process of public spending is a negotiation, often between groups with different interests, who nonetheless have a common interest in ensuring that there is a maximization of utility.

[Xerographica]

Terrible idea.

Five minutes talking to a cross-section of the population tells you why this is a horrible idea.

The only thing that makes our democratic even remotely possible, is the fact that individual prejudices are drowned-out by the acquiescence of the majority.

Talking to a cross-section of the population is what sold me on this idea. People have a diverse range of concerns and values. You and I wouldn't derive the same amount of utility purchasing the same exact private goods...and we certainly wouldn't derive the same amount of utility purchasing the same exact public goods.

Why wouldn't we want the distribution of public goods to reflect the concerns and values of our entire nation? Because Americans are greedy, racist, homophobic, sexist idiots? Sure, some are. But in general Americans are diverse, hard working, innovative, creative and talented. Our people are our most valuable resource...and we can put our most valuable resource to work by allowing taxpayers to choose which government organizations they give their taxes to.

[Not Safe For Work]

Terrible idea.

Five minutes talking to a cross-section of the population tells you why this is a horrible idea.

The only thing that makes our democratic even remotely possible, is the fact that individual prejudices are drowned-out by the acquiescence of the majority.

Talking to a cross-section of the population is what sold me on this idea. People have a diverse range of concerns and values. You and I wouldn't derive the same amount of utility purchasing the same exact private goods...and we certainly wouldn't derive the same amount of utility purchasing the same exact public goods.

Unless you secretly want us to get invaded, you're half-right at best.

We both get exactly the same advantage out of our taxes on many things. We both get to not wake up with Soviet tanks parked on the fornt lawn, for example.

But do we both get the same exact package? No - and there's no reason why we should. It's not even a desirable state of play. Because you and me have our private opinions - but the nation as a whole doesn't. The nation as a whole has a slight surplus in one department this year, and a shortfall in another - so it pushes the numbers around.

And that's as it should be. Random individuals don't see the big picture. They don't have all the information. So they shouldn't make those decisions.

[Trotskylvania]

Terrible idea.

Five minutes talking to a cross-section of the population tells you why this is a horrible idea.

The only thing that makes our democratic even remotely possible, is the fact that individual prejudices are drowned-out by the acquiescence of the majority.

Talking to a cross-section of the population is what sold me on this idea. People have a diverse range of concerns and values. You and I wouldn't derive the same amount of utility purchasing the same exact private goods...and we certainly wouldn't derive the same amount of utility purchasing the same exact public goods.

Why wouldn't we want the distribution of public goods to reflect the concerns and values of our entire nation? Because Americans are greedy, racist, homophobic, sexist idiots? Sure, some are. But in general Americans are diverse, hard working, innovative, creative and talented. Our people are our most valuable resource...and we can put our most valuable resource to work by allowing taxpayers to choose which government organizations they give their taxes to.

There's an institution that already allows a diverse range of citizens to make their concerns known, and to deliberate on ideas.

It's called the government. This is why we have elections and political parties: to deliberate what exactly is in the national interest, and ultimately distill it into a workable program. Tax choice would make that impossible. Because it isn't collective, and it isn't deliberative.

It's every man for himself deciding where he wants his tax money to go. This is something that he has neither the education, the time, nor the resources to actually know. At the very best, all you can hope for is people behave altruisticly, and try their best to allocate funds where it needs to go to fulfill social priorities and promote the general welfare. And they'll fail.

But more likely, people will just have their money go to things they use and care about, and not to things they don't think they benefit from. It would introduce the free rider problem into the government, the institution that has been tasked with dealing with the free rider problem.