I was wondering the other day what it would be like if everyone had to pay directly for the government services they used, what they would do. If they had to pay every time they drove on the road, they might do a bit less driving. If they had to pay by the pound to have their garbage picked up, they might recycle more and compost. If they had to pay their your kids school they likely would be willing to pay more, but would have expect more accountability for and influence over school administrators. The list could go on, but people would be more careful in determining how much of these services they bought.
Right now we get taxed, and this money is spent by bureaucrats without any real motivation to be wise with the money. Now I know that there is a bit of a social compact where we all benefit from these services being offered to others even if we do not directly benefit. For example, I have heard childless couples and single people complain about paying property taxes to support schools when they do not have any kids. They will benefit when they collect social security from the increased taxes paid by these educated kids. Also these educated kids will continue to help the economy grow and hence benefit those who complain. Also, as these kids become educated they provide not only economic advancement, but also help technological advancement that benefits everyone. So there are benefits that we all share and again I am willing to put more money in the pot to help pay for them, but only to an extent.
I keep hearing the number thrown around that only 68% of households even pay income tax. As a result we have 32% who pay none or in some cases even get some back. This then results in government services being a form of welfare to these people. Also, as they are not giving up money to pay for these services they are happy to have the services become more extensive because it is not costing them a dime. It is always easy to spend other people's money. Also if there is waste, they do not care because the "rich" are paying for it. If everyone had to pay for these services, it would give them a sense of ownership and motivate them to reign in unnecessary spending. By having so many people not paying for these programs creates another problem: those who are in political power can use these programs to get people to vote for them. It is a way for politicians to gain power. Now I know that is a sinister view, but can we doubt that it does not happen?
In the end do people value an item more that was given to them by some faceless entity, or something that they had to earn? I think we can all answer that it is the latter.
I think our country would be better off if we each had to pay at least some taxes. That means everyone will ask themselves, what am I really getting for this? The liberals always talk about fairness and equality, every where but not in the tax code, which if it were fair and equal would have flat tax!! But liberals are vehemently against such things because there is a constituency that receives something for nothing (or at least nothing of their own) that supports them and a constituency that feels guilty because of their success so they want all successful people to feel guilty and to pay more taxes.
Americans are a generous people (especially conservatives according the the book Makers and Takers: Why conservatives work harder, feel happier, have closer families, take fewer drugs, give more generously, value honesty more, are less materialistic etc.
), and I think most would willingly accept a moderately progressive tax code (say all income below a threshold is excluded from tax and then 10% above that with an additional step to maybe 15% to 20% later) if they knew that everybody was paying as least some tax and feeling some of the pain.Even our currently extremely progressive tax structure would be more palatable if everyone paid something, but 32% do not. I certainly would love to see a reduction in spending by our federal government. Let the states take care of more of their needs. It will better fit the needs of the local people. Also collecting taxes from one region and then sending that money to another region to pay for some local program is another way of redistributing wealth. The DC metro receives some federal money to help it operate. I have asked myself why a farmer in Iowa or Arizona should have to pay for the DC metro. That is not fair!
Further there are other ways to tax like sales taxes or a flat tax. We definitely need to simplify the tax code. So much our our productivity is wasted on preparing tax returns and also in trying to avoid taxes. That is effort that could be diverted to producing goods and services that would benefit us all. Of course the CPAs and tax lawyers would oppose it to protect their jobs.
I hope that each of use who believe in fairer taxes have our voice heard!!!!
EJN
