How would you spend $1,000,000,000,000 ?
Do you check the box that says sends $3 of your tax dollars to the Presidential Election Campaign Fund? If you have that choice, why not other choices?
With the recent government shut down, and tax season approaching I’ve started thinking a lot about how our government takes in money and where, and on what, it decides to spend that money. I started thinking, rather than letting politicians decide how to spend our money, what if there was a better way to decide where the government spends its money?
As a fundamentally capitalist society, it should come as no surprise that many if not most government issues come down to money. The recent government shut down is a perfect example. The debate around the shutdown can be summed up in one question: Should $5 billion dollars be spent on building a border wall or could that money be better used in another way?
That has a simple answer, right? If you are not an idiot you know that securing our borders is critical to keeping our country safe. And if you are not stupid you know that there are much better things to spend money on. So if the wall is so great why not spend $10 or $20 billion? If there are other important things why not spend $50 billion on those things? Why not $2 billion or $200 billion on each of these?
See these numbers have no real meaning for most people. To most people, a billion dollars, 10 billion dollars, 100 billion dollars are just numbers if we try to think about them in terms of money we fail. These amounts fall on the other side of the line called “more money than I’ll ever see”. This is the first problem with the original question, “Should $5 billion dollars be spent on building a border wall or could that money be better used in another way?”
The problem becomes even more apparent when we talk in term of the overall federal budget. That $5 billion, that is only about one tenth of percent of the $4.5 TRILLION dollars the US government will spend this year.
It’s difficult for most people to accurately comprehend these extremely large dollar amounts. When we buy most things in our daily lives, we have a reasonable ability to judge relative value. We know when gasoline is cheap, we know when it feels expensive. When we shop for a car, we know what features and reliability we can expect in a $15000 car and what we should expect in a car over $40000. We even have an inherent understanding of the differences between a multi-million-dollar mansion and a $20000 house even if we’ve never been in a mansion like that. Once we start talking about hundreds of millions or billions of dollars, we lose our sense of perspective. It raises many questions that we wonder but do not ask. Questions like: How much should a border wall cost? If we spend $5 billion on a border wall is that expensive? Is that the BMW or the Hyundai of border walls? What features does this border wall have? Does our border wall need power windows?
The second problem with the original question is the question of best and highest use. This is a concept that dates back over a hundred years and comes from the area of real-estate development. When narrowed down, to its essence, it states that when feasible a property should be used for the purpose that results in the highest possible value. The second part of the original question, “could that money be better used in another way?”, challenges us to bring this concept into the arena of government spending. What is the best and highest use of government money? How can government money be spent in a way that we gain the highest possible value from it?
The problem here is that this question is inherently a personal values based question. Pick any two people in the country and ask them to list in the things they think that the government should spend its money on. I think you would be surprised at how different the lists would be even from very close political allies. The truth is that individual preferences and priorities are as varied as people. The variables that determine what any one person believes is the best and highest use are nearly infinite and indeterminable.
We attempt to address this in our political system by having political parties that unite people based very, very, broad philosophical grounds. Conservatives vs Liberals, Hawks vs Doves, Capitalists vs Socialists. We proceed to nominate and elect leaders from these groups that then write policy supporting one side or the other. However, this arrangement leaves little room for those that have a more diverse and nuanced set of priorities. Where does a person that believes in a strong military and national healthcare fit? Who does a capitalist that believes the wealthy should pay more in taxes vote for?
This is fundamentally a question about giving voice to the people of the country regardless of the political state of our nation. Perhaps then that’s where we should start. We already know that our political process is dominated and controlled by our two-party system. Will that ever change? I don’t know, it’s doubtful. However even without trying to disassemble the system as it is, we can still give a voice to everyone to share their priorities.
When Congress passes spending legislation it earmarks spending for specific programs throughout the government. These amounts are then sent to government agencies who must spend that money on those specific programs. Ask yourself this, if Congress can do it why can’t we?
Just like you check the box that sends $3 of your tax dollars to the Presidential Election Campaign Fund, what if you check a box that would dedicate 2% of your money to the military? What if you could earmark 2% of your tax dollars to cancer research? How about education, national parks, foreign aid, disaster relief or paying of the national debt? What if you got to choose where a portion of your tax dollars went?
Democracy in the United States is predicated on a simple idea, one person, one vote. While this true in our actual elections it is fundamentally undermined by everything leading up to the election.
The decision handed down by the Supreme Court in Citizens United v. Federal Election Commission and following on the prior ruling in Buckly v. Valeo, firmly establish that money is a form of free speech. It’s easy to see that this means that money has a voice, and the more money you have, the louder your voice can be. Now I have no desire to deprive anyone, corporation or wealthy individual from using their money to express their point of view. However, maybe it is time we give voice to the largest pool of money in our political system. It’s time we give a voice to our tax dollars.
I propose a very simple system to accomplish this. Each year when you file your tax return you get to earmark a percentage of your tax return for specific departments and programs in the government.
Of course, there would be limitations to this system. First, the choices you would have would be limited. I envision perhaps 25 choices, chosen by Congress, each would allow you to dedicate 2% of your taxes to that program or department. With 25 choices at 2% each, the most you could ever earmark would be half of your paid taxes. This is necessary because we still need a general fund and we all must recognize that we have to pay money for the general use of the government.
Second, the earmarks would be “soft” earmarks. This means they would fundamentally be non-binding on Congress. While this may be a disappointment to many the nature of government is that we cannot hamstring our elected officials onerously to the whims of the people. Congress must still hold the purse of the nation. Yet when spending money from that purse congress should know full well the will of the people.
This accountability comes when the numbers are published. How did people want their money spent versus how did Congress actually spend their money? Are their justifiable reasons why money had to be spent differently than people desired? Did too few people want to spend money on the military? Were there more natural disasters this past year than expected?
The point is that the taxpayer earmarks would not replace Congress in the role of chequebook holder of the nation. They would, however, provide greater transparency to see if the will of the people is being followed when it comes to spending. After all, in a capitalist country isn’t controlling where the money goes where the real power is.
A system such as this would have helped greatly with the last great question around the government shutdown, “Should $5 billion dollars be spent on building a border wall or could that money be better used in another way?” In this case, it could have been handled very easily, Congress could have simply added a checkbox “Do you want to give 2% of your tax dollars to build a border wall?” to the 2018 tax return forms.
A system like this would also help people think in more realistic and understandable amounts about the money the government spends. As a percentage of each person’s tax contribution, the dollar amounts would automatically be calibrated in terms that each individual taxpayer could easily comprehend.
Someone on the lowest end of the taxpaying spectrum would be deciding how to spend just a few dollars. So, maybe because they have a son in the Army and a sister with cancer, they would earmark taxes for military spending and cancer research.
While further up the spectrum someone making six figures might be deciding to spend hundreds or thousands of dollars to pay off the national debt or support our national parks because these things are important to them.
Think about this, the government will collect approximately $2 Trillion in income taxes for 2019. What if we, the people paying the taxes, got to say how $1 Trillion of that should be spent?
