I really like the concept of tithing (broadly, putting 10% of incomes toward a larger project) and wish it was used more generally for taxation, funding projects, local development, etc. The simplicity and “human comprehensibility” makes it much more attractive than other, more complex funding and taxation methods.
Government as a set of services you pay towards, some of them optionally, might be an interesting way to get people to vote for new/to maintain things: with their wallets.
The problem is no one wants to pay for the boring necessary work like funding inspections for the water treatment facility, but instead would focus on sexy cool things like space launches or new trails in Yosemite
You baseline that stuff and then add additional boxes you can check. California does it as additional “gifts” but the federal return does it already for the presidential slush fund. You could increase that more - add a 1% tax but you get to check a box and determine where it goes.
Mathematically it wouldn’t do much but it would make people feel more invested I suspect.
Pick-and-choose taxes are a terrible idea for the simple reason that they're very easy to weaponize.
If some guy walks into your government office and says he'll give you ten million dollars to increase everyones' salaries, but only if you arrest all the homeless people on his street, you just created a perverse incentive. You can claim that anti-bribery laws fix this, but it's a who watches the watcher problem. To be clear, regular government has this problem too in the form of political donations and lobbying, but removing even the thin veneer of legitimacy that our current taxation system has (where you can't opt out of paying for social safety nets or into specific initiatives) makes open bribery almost inevitable.
My original thought was something like: if you make tax rates uniform and easily understandable (e.g. 10% flat rate for everything and everyone) and remove all deductions, exceptions, etc. then you would get less tax avoidance/minimization and ultimately more tax revenues. But I’m not a tax accountant or economist and I haven’t done the math on this. At the very least, the entire infrastructure would be far more transparent and efficient.
One of the hidden issues of complex tax is the millions spent on pay clever people to either account for it, minimise it, or check it. I'd love to know how much is spent on that that could be otherwise spent on all of that!
Well, it would certainly simplify some of it! Plenty of non-government uses for accounting; it's just we would have some of those clever people working to produce instead of to account to government.
Lots of poor people have more than zero income. If you live in $1000 a month, 10% of that is $100. $100 can make an enormous difference if you have no savings. Eg, easily the difference between being able to drive/take the train to work or not.
Meanwhile if you earn $1M/month, then it's absolutely trivial to live in a way that $100K more or less makes no practical difference.
Or if you do odd jobs and managed to scrounge up $100, you now have to do the paperwork to pay the $10 you owe, which seems like an odd thing for a government to bother with taking care of and enforcing.
Now here comes the logical thought of "what if we set a minimum", and you have the beginnings of tax brackets.
Mathematically, this is equivalent to a small UBI.
Or vice versa. UBI requires lots of people to implement it. A simpler income tax rate doesn't.
What's nice about it is you could basically just get paid post-tax from every income source, and they all know to subtract 10%, and the government would just need a simple web portal for you to claim back your first 25k.
That applies only for people who have absolutely nothing.
The point is:
To pay 100 EUR per month hurts much more when you only have 1000 EUR to spend, much more than it would hurt to pay 1000 EUR a month if you had 10000 EUR at your disposal each month.
Comments
I really like the concept of tithing (broadly, putting 10% of incomes toward a larger project) and wish it was used more generally for taxation, funding projects, local development, etc. The simplicity and “human comprehensibility” makes it much more attractive than other, more complex funding and taxation methods.
Government as a set of services you pay towards, some of them optionally, might be an interesting way to get people to vote for new/to maintain things: with their wallets.
The problem is no one wants to pay for the boring necessary work like funding inspections for the water treatment facility, but instead would focus on sexy cool things like space launches or new trails in Yosemite
You baseline that stuff and then add additional boxes you can check. California does it as additional “gifts” but the federal return does it already for the presidential slush fund. You could increase that more - add a 1% tax but you get to check a box and determine where it goes.
Mathematically it wouldn’t do much but it would make people feel more invested I suspect.
Fun fact: the US Treasury accepts donations to pay down the debt: https://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
You can also donate to the general fund: https://www.fiscal.treasury.gov/public/gifts-to-government.h...
Your first link doesn't work.
Looks like it moved :
https://www.pay.gov/public/form/start/23779454
Hence the "some of them optionally".
Pick-and-choose taxes are a terrible idea for the simple reason that they're very easy to weaponize.
If some guy walks into your government office and says he'll give you ten million dollars to increase everyones' salaries, but only if you arrest all the homeless people on his street, you just created a perverse incentive. You can claim that anti-bribery laws fix this, but it's a who watches the watcher problem. To be clear, regular government has this problem too in the form of political donations and lobbying, but removing even the thin veneer of legitimacy that our current taxation system has (where you can't opt out of paying for social safety nets or into specific initiatives) makes open bribery almost inevitable.
The same mechanism that determines why that can't happen today could still be in place.
My original thought was something like: if you make tax rates uniform and easily understandable (e.g. 10% flat rate for everything and everyone) and remove all deductions, exceptions, etc. then you would get less tax avoidance/minimization and ultimately more tax revenues. But I’m not a tax accountant or economist and I haven’t done the math on this. At the very least, the entire infrastructure would be far more transparent and efficient.
One of the hidden issues of complex tax is the millions spent on pay clever people to either account for it, minimise it, or check it. I'd love to know how much is spent on that that could be otherwise spent on all of that!
Absolutely, it would destroy an entire industry. Probably hundreds of billions in costs and a few hundred thousand jobs.
Well, it would certainly simplify some of it! Plenty of non-government uses for accounting; it's just we would have some of those clever people working to produce instead of to account to government.
this is a bad idea for society, because it disadvantages poor people even more.
10% of 0 is 0
Lots of poor people have more than zero income. If you live in $1000 a month, 10% of that is $100. $100 can make an enormous difference if you have no savings. Eg, easily the difference between being able to drive/take the train to work or not.
Meanwhile if you earn $1M/month, then it's absolutely trivial to live in a way that $100K more or less makes no practical difference.
Or if you do odd jobs and managed to scrounge up $100, you now have to do the paperwork to pay the $10 you owe, which seems like an odd thing for a government to bother with taking care of and enforcing.
Now here comes the logical thought of "what if we set a minimum", and you have the beginnings of tax brackets.
The easy solution is a single, general deduction. Everyone's first $25k or so is tax free. Everyone pays 10% on every subsequent dollar.
Mathematically, this is equivalent to a small UBI.
Or vice versa. UBI requires lots of people to implement it. A simpler income tax rate doesn't.
What's nice about it is you could basically just get paid post-tax from every income source, and they all know to subtract 10%, and the government would just need a simple web portal for you to claim back your first 25k.
Why? If you earn $1M/month you can contribute a lot more than that and not notice it.
That applies only for people who have absolutely nothing. The point is: To pay 100 EUR per month hurts much more when you only have 1000 EUR to spend, much more than it would hurt to pay 1000 EUR a month if you had 10000 EUR at your disposal each month.
Kickstarter for government projects?
GaaS
Yeah, I wish taxes were only 10% of my income as well