The Emergent Fool

Leveraging Taxes for Civil Engagement

Posted by Rafe Furst in Alternative Institutions, Economics, Government, Incentives, Society on April 14th, 2009 | View Comments

Dan Ariely had an interesting idea on NPR’s Marketplace today. Here’s the audio of the segment. The idea is to get tax payers thinking about how their tax dollars should be spent, thus getting them more civilly engaged. His research and that of others suggests that such activity would reduce the propensity to cheat on one’s taxes, and may even get people to pay more than they would otherwise.

This reminds me of the system we had in college at my student union where the election ballots each year would allow you to specify the exact breakdown of how your (mandated) contribution would be spent on a percentage basis. Don’t care about Sunday night flicks, but want more Hispanic cultural events? You can vote with your wallet. There was a separate process for determining which options made it on the ballot, but I know from personal experience that I did feel much better about my involuntary contributions each year knowing I had some control over how the money was spent.

So, could Ariely’s concept actually work on a national level? Interestingly, he wasn’t necessarily proposing that tax revenue be allocated according to taxpayer preferences, but rather that the exercise itself, for the taxpayer, helps induce civic-minded behavior which helps us all.

Perhaps we can go one further and actually use the stated preference data in the Congressional budgeting process.

Thoughts?

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ace

I haven't listened to the audio yet but I have been proposing this for years.

The most frequent argument I get is the question of how detailed do you break down the categories. Is foreign aid a single category or is it broken down by each country and then by organization within that country? You could end up with 1000 categories just for foreign aid.

Would (could) the average citizen invest the time to make a reasonable decision? If her preferences weren't even used in the end would they go through the exercise the following year?

The marketing dollars that would be spent by special interest groups (the Save the Rafe Fund) to convince individual taxpayers to allocate more to them would be shocking versus the money spent to influence the current decision makers.

So as tantalizing as it would be to put the decision making power in the hands of the people who pay for the outcomes, I'm afraid that we are stuck with electing the person we think will best represent us. We can then be free to tend our fields.

Perhaps on any substantial issues our elected representative could at least ask for an internet poll of his constituents and be bound by their majority decision. There would need to be some mechanism to ensure equal access to computers etc etc...