I was listening to Tech Nation today on the treadmill -- the episode from Jan 13 2009 with Darrell Rhea of Cheskin Added Value. He made a great point: that when people give money to charity, they feel good about themselves. But when they pay their taxes, they feel really bad -- even though their taxes go for schools, hospitals, fire departments, and other important societal services. And that made me think about a few things.
One reason for this discrepancy is probably a feeling of control. When I make a charitable donation, I choose the charity. With taxes, I don't have much of a choice where the money goes. Well, I kind of do, but it's a really circuitous level of control: I vote for representatives who express certain values (pro-education, anti-waste) during the election cycle and hopefully defend those values when the time comes to make a budget. That's a pretty loose connection.
So I had an idea: what if, when you're paying your taxes, you got to specify a suggested earmarks for using your dollars? You could pick from a list of (say) 20-30 high-level programs (like "Education", "Health care", "Foreign aid") and make some allocations. "20% education, 10% education, 10% defense, 2% foreign aid, the rest for whatever." Entirely voluntary, no obligation on the part of taxpayers. Obviously these would be different for different levels of government -- cities might have "Police", "Parks", "Roads" as their programs.
The tax agencies could publish the numbers on these mini-budgets, and citizens could compare what they collectively set up as priorities versus what their representatives actually allocate money for.
Sure, there'll be some natural discrepancies -- no one is going to like allocations for boring stuff like servicing debt or administrative costs. And there are some costs involved, although I think they'd be pretty low if you're already collecting tax return forms and generating statistics. And there'd be lots of people who'd write-in their pet projects ("100% UFO research") which would skew things significantly.
But I think the general idea would be really helpful. People would see tax time as a time to use their voice, and politicians would have a clear idea what people want their money spent on, and in what amount. Most of all, it's closing the loop on paying taxes and making budgets, and I think that's a good thing for democracy.