Donating to the Government

Though blessed with lower taxes than those faced by many in western Europe, Americans never seem to get tired of complaining about taxation. Indeed, one could somewhat facetiously argue that the American nation was founded by people who simply didn't want to pay their taxes. When it comes to paying taxes, attitudes haven't changed much in the past couple of centuries. Given that there isn't corresponding popular enthusiasm for cutting government services, some brand the American electorate as selfish and wanting to have it both ways. I, personally, have a different view.

The United States is in some respects unique in that individual freedom and personal choice are a fundamental part of our very culture. We have no kaisers or kings past or present to honor; instead, we honor the individual. We expect to have the ability to self-determine the general path in life we will follow, and we expect to be able to influence the actions of our government. I would argue that one of the reasons taxation is such a contentious issue is that it doesn't let Americans be Americans: the average citizen is too shut off from the process of government spending. In an age of unpopular economic bailouts, the alienation between citizen and government when it comes to controlling the federal purse strings is becoming only more deeply felt.

Politicians have made matters worse by tending to discuss spending only very superficially during campaigns. Even Barack Obama more or less promised the world to his supporters during the presidential election -- unrealistic promises, even if a candidate is sincere, set the voters up for disappointment when they discover what the government is really spending their money to do. I think there is a feeling among politicians that budgetary matters are "boring" and should only be broached to the public in a few tried-and-true ways (like promising the world or promising to cut taxes...Obama actually used both approaches!). Boring they might indeed be, but they're also expensive for the taxpayer. As long as politicians can both frame the debate on spending during elections and make the decisions on how to spend while in office, it will remain difficult for John Q. Public to play a prominent role in deciding how his tax dollar should be spent.

I don't hold out much hope for politicians to change a game plan that still works awfully well for them so one solution might be to democratize spending. Let the people work out a budget or approve a budget in some way or another. I've said before that I think this would be interesting to see, and I think it would change America in many ways...but I worry that voters may not have the knowledge (or be willing to do the research) needed to make wise decisions when it comes to subjects like military spending, funding the space program, and distributing foreign aid. In truth, we probably wouldn't do a worse job of it than the politicians do -- it would just be different, in some ways better and in some ways worse. If all we really want to do is give the people a greater opportunity to set spending policy, though, there's a much easier solution that wouldn't require a dramatic change in the way America does business.

What I think should happen is that the U.S. government should put a big sign up in its theoretical front window that says, "Donations Welcome!" I've heard people like Warren Buffett state publicly that they aren't taxed enough ,and I have always wondered why people like that couldn't pay more to the government if they wanted to do so. Just letting billionaires send off blank checks to the government doesn't accomplish much, though -- if anything, it probably just encourages frivolous spending. What I really would like to see is the ability to give donations to the government with strings attached. For instance, a "Pay Down The Deficit" or "Shore Up Social Security" fund could be created. People could make voluntary contributions into these funds with the understanding that the government would have to use them for their intended purpose. I would fully expect individuals like Buffett to contribute the most in the beginning, but if this plan proves effective in actually yielding results I think average people would consider donating a few dollars to a worthy budgetary cause as well. The biggest negative to this plan that I can see is that it might seem to make government even less fiscally responsible -- they could effectively outsource some of their spending to the public without facing the unpopularity caused by raising taxes and so would have less reason to budget public funds responsibly. However, this plan will make people feel more involved in the spending process, and I would expect them to start expecting more of their elected officials as a result. In other words, if the people manage to massively reduce America's debt and the politicians end up massively increasing it again, I think a lot of politicians wouldn't get reelected. Politicians would be held more accountable for their spending decisions if they weren't the only spenders in town.

Perhaps ideally all government revenue could be raised voluntarily through donations rather than compulsorily through taxation. Sadly, I don't expect to live to see such a perfect system enacted in my lifetime partly because it would be dangerous -- imagine how even more precipitously government revenues might drop in a recession -- and partly because it'll always be very hard for people to put aside their individual dreams and goals for the public good. On one hand, people do want public schools and public roads and other things the government provides; on the other, these same people want to own homes and send their children to college and take their spouse out to dinner at a nice restaurant on their anniversary. At least in our present system it isn't foolish to pay your taxes -- if the government relied solely on donations, though, those who donated would be forced to do with less than those who acted more selfishly. Still, I think a lot of people might be surprised at just how generous the public can be if given the right opportunity.