Your Money, Your Choice
Rethinking Taxes: Proud to Pay
Perhaps more important, people given the opportunity to allocate a portion of their tax dollars had a weaker sense that paying taxes was a restriction on their freedom—they had lower general reactance toward taxes. These results held regardless of ethnicity, age, income, political affiliation, and conservative or liberal media exposure. As a whole, the results demonstrate that tax choice substantially increases individuals’ sense of benefit from paying taxes and reduces their sense of frustration toward payment in general.
More Butter, Fewer Guns
One significant benefit that tax choice portends is its moderating effect on the United States’s inflated spending on defense.
Defense spending currently consumes about 58 percent of the discretionary federal budget. In the last ten years alone, military spending has increased by 87 percent, dwarfing the rate of growth of any other federal outlay. The ten-year growth rate of military spending climbs to an astonishing 145 percent when the cost of the wars in Iraq and Afghanistan is included.
Scholars such as Andrew Bacevich, the late Chalmers Johnson, and William Pfaff have persuasively argued that these numbers do not represent popular will, but reflect the political influence of a highly entrenched and enormously powerful group of special interests that benefits from military spending. Survey results were consistent with this argument: Taxpayers who did not see the current allocation of the discretionary federal budget opted, on average, to devote less than 20 percent of their total allocable taxes to the military. And while self-identified Republicans were likely to allocate significantly more to the military than Democrats (25 percent v. 11 percent), neither approached anything like the current allocation figures.
Comparing actual current allocations to how our survey respondents said they would allocate tax dollars yielded some intriguing results. Respondents across the board shifted spending toward education, training, and social services—all areas that are major job-creation engines and paths to sustainable improvements in standards of living. Democratic respondents allocated 25 percent of their allocable tax dollars to education, training, and social services, while Republicans allocated about 21 percent.
Other categories also saw substantial gains. Most notably, energy, the environment, and science increased from approximately 4 percent to 16 percent of spending. Even Republican respondents showed substantial upward movement in this category, allocating about 14 percent to energy and scientific issues. Bipartisan consensus also prevailed on housing and community development funding, which more than doubled for both parties, from 5 percent to about 11 percent. Interestingly, dollars for anti-poverty measures did not change substantially, holding at approximately 13 percent of the budget overall, but higher among Democrats, who allocated 16 percent to such efforts, compared to 10 percent among Republicans.
Remember that the allocations, at least in the scenario sketched out in the study, are for only 10 percent of a taxpayer’s total payment. Legislators would still have a job to do. But tax choice would allow their constituents an opportunity to voice clearly their policy preferences. And from the results of our study, they want to scale back money spent on defense and scale up investments in other areas.
A Check Against Special Interests
Tax choice also has implications for the distribution of political power. That distribution is heavily weighted toward the wealthy, who have the resources to influence the political process. Their hold on power has only tightened in the wake of Citizens United v. Federal Election Commission, which endowed corporations with a First Amendment right to spend unlimited funds on speech advocating the election or defeat of particular candidates for federal office. By tying political expression to wealth, the Court distorted a political system based on the principle of “one person, one vote.” Under Citizens United, the more dollars you have, the more you can spend to secure the election outcomes you prefer. And that is exactly what corporate interests did. As the Sunlight Foundation reported in January, political groups that depend on corporate cash spent nearly $500 million in 2010, up 66 percent from the $300 million spent in the 2006 midterms.
In their decision, the Citizens United majority reassured us that “[t]he appearance of influence or access will not cause the electorate to lose faith in our democracy.” But in fact, the electorate has never been more cynical about what their government does and whom it does it for. In the mid-1960s, less than a third of Americans agreed that “government is pretty much run by a few big interests looking out for themselves.” By 2008, the share was more than 70 percent. Virtually everyone senses what the American Political Science Association documented in 2004: “Citizens with lower or moderate incomes speak with a whisper that is lost on the ears of inattentive government officials, while the advantaged roar with a clarity and consistency that policy-makers readily hear and routinely follow.”
Tax choice restores some of the citizen’s voice. While hardly a comprehensive solution, tax choice can mitigate the problem of unequal democracy by permitting individual taxpayers to speak with their taxes, without draining their own disposable income.
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