View Full Version : State Budget & Taxes: A Direct Democracy

17th-May-2011, 12:34 AM
The idea is as follows:

Citizens directly allocate how a portion of the national budget will be used.
When paying taxes, citizens choose how their tax money is distributed among governmental programs.
Tax money must be allocated to the programs as dictated by the taxpayers.
The portion of the national budget that comes from sources other than taxes must be decided upon BEFORE citizens make their tax distribution decisions.
All state information concerning the budget must be available for all citizens to view.

Are there any real-world applications of this idea (or something similar)?

What would be the immediate and long term consequences of such a system?

Obviously, factors such as citizen education and political corruption would still be important factors.

Ensuring complete budget transparency would be rather tough to implement as well- especially concerning military affairs. (A state at war would not be very receptive to COMPLETE transparency, so perhaps some sort of compromise?)

Also, the method for determining how much taxes an individual owes probably would have to be much simpler than for example- the United States for this to work very well.

If there isn't a name for a system like this, help me come up with a good name for it ("Autonomous Tax Distribution" sounds pretty dull... :p).

17th-May-2011, 03:30 AM
I assume you are talking about the US. Either way, my answer is about the US.

I've always thought this would be, at the very least, a cool experiment. As you say, it is a direct democracy, which would take the wind right out of Congress's sails.

I think the immediate consequences would be huge overfunding for the military and NPR, with some very important things being completely overlooked because they are lost in the political noise. TV ads would be taken over by government departments begging for attention and trying to look important. Fox news would tell its viewers how to spend their tax money while demanding that taxes be eliminated. With no general fund (everything is earmarked), there would be no room for Congress to maneuver, and some parts of government would grind to a halt.

In the medium term, public education would either find a way to engage the community or go extinct. Assuming they survived, civics classes would include a section on how to read a balance sheet. Big businesses by this time would have figured out a way to buy tax funding directly, and individual citizens wouldn't be able to compete. Unless they formed coalitions, probably along ideological lines. Planned Parenthood and Abstinence Only programs would have all the money they want.

In the long term, I give this system about a 10% chance of surviving. If it did, you'd have a completely different culture than there is now. I can't imagine what it would be like. Either people would have tax proxies, or politicians would have thugs out threatening people to spend a certain way.

The only similar organization that comes to mind is the Red Cross. People can designate how they want money to be applied, and sometimes they have a huge surplus that they aren't allow to move to cover a huge shortfall. During Katrina, they couldn't hire enough drivers (who have to be licensed and professionals, so therefore paid), because people insisted the money go for volunteers only. On the other hand, they probably get more donations, because if you want to donate to Haiti, then to Haiti your money will go. People have confidence that the Red Cross will stick to the wishes of the donors. So it has good and bad parts to it.

Anyway, great thought experiment. I have a bad cold right now, which might be skewing my conclusions to the bummer side of the ledger. I'm sure there are a lot of other obvious implications that I am not seeing right now.

I've always mentally called it "Line Item Taxes."

17th-May-2011, 06:20 AM
Assuming there could be a gradual transition to this sort of system and it stabilized- it would be neat to see friendly competition between government agencies. However that is probably wishful thinking ^_^. If you look at the US and the JUST income tax it looks like a bit over $1 Trillion was collected before tax returns. And the proposed budget for 2010 was a bit over $3.5 Trillion in requested funds.

With a third of the budget being determined by tax payers there would be massive surpluses in some programs (like you said). For a government as large as the United States there would have to be caps on some programs- leaving a lot of overflow that would either have to be redistributed by general taxpayer preference or something.

Perhaps it would be better if the choices taxpayers had were more broad? (Defense, Welfare, Education, Research, ect...) Congress could then work to distribute the funds into the actual programs.

Either way it would be hard to tell how this would end up without some more case studies. The way things stand today, a system like this being used in a country like the United States would probably lead to disaster (for the US) haha.

In a more globalised world where there isn't as much of a threat of war/violence this would probably be more viable. But like I said... It's hard to guess without some real world examples.


24th-May-2011, 07:16 PM
I haven't thought about giving the people actual choice over where the money goes. But I have thought that if we each got a breakdown of how our taxes were spent, a bit like how I get a breakdown of how my money was spent on my other bills, which often just breaks things down into broad categories, and then only breaks things down further if appropriate, then I'd probably feel a whole lot better about those expenditures. So if I did know where my money was going, and agreed to those decisions, then I'd feel a whole lot better about what politicians were doing, even if they didn't always work out exactly as I would have liked. I'd probably be more likely to see politicians in a much better light.

Plus, if I could see that there was a lot more money put into education or healthcare in the last few years, but I didn't see much improvement in those services, then it could guide me over what to complain about, rather than everyone just complaining about everything that isn't perfect, irrespective of how much money is or isn't put into it.

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18th-March-2012, 02:42 PM
Universal democracy enhanced by technology was the background of a science fiction story maybe 30 years ago. I forget the title, the author, and everything else, but if you wanted to retain the privileges and rights of full citizenship, you had to periodically stop what you were doing and, using a machine much like an Ipad, vote on a referendum on a critical issue before the Congress. I don't remember how it was sorted out, not everything got voted on, but issues of policy -- should we spend more to help farmers in this year of drought or not? -- were typically put to referendum, with Congress then acting accordingly. And there were some "hard" votes, on specific things like how much to spend for the farmers.

It's an interesting idea. One key problem is that the popular response may not be the "right" response. Kind of like American Idol, where people periodically reward appealing contestants without really taking into account their ability to sing at a professional level. Then the judges have to rescue someone, etc.

Not that I watch American Idol.
OK, this year I do, because as a permanently, irreparably off-key singer I am fascinated by the strong, true voices they have in abundance this year.

18th-March-2012, 10:46 PM
This is an interesting idea. I never thought about it.

One question. How would you foresee the ability of people to vote? Proportional to their contributed tax or one person one vote?

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19th-March-2012, 03:37 AM
For years I have suggested to some friends that it would be nice for those who file their taxes electronically to have some page that has a bunch of sliders on various spending issues. Of course, there would be limits to each, and no person's contributions would be all that significant. However, imagine if we had something like this:

1) Health expenditures
1a) Something
1b) Something else
1c) Abortion procedures
1d) Something else

2) Defense expenditures
2a) Veteran benefits
2b) R&D for the military
2c) something else
2d) something else


Anyone who is up in arms about his or her tax dollars funding abortions would just drag that slider to zero. Problem solved. That person's tax dollars are no longer funding abortions and that person can shut up now.

Piece of cake.


19th-March-2012, 04:08 AM
I've considered OP's idea before, and I think it would end up causing massive amounts of waste and inefficiency.

Program A may only need 10 million dollars per year to run efficiently, but through this sort of system, it could have 10 billion dollars pointlessly dumped into it. Another program that's expensive and important, but less visible to voters, would end up seriously underfunded.

On the plus side, our military would undergo a drastic reduction in funding.

Basically, what this system does is take resource allocation and remove it from self-serving but semi-knowledgeable jackasses, and puts it in the hands of hundreds of millions of mostly completely politically ignorant people, all with zero oversight and intelligent control. It's like trying to make dinner, but you don't get to decide what's in the fridge- millions of ignorant people arbitrarily decided what you needed, so now you're stuck trying to make dinner with 35 gallons of canola oil, 3 pounds of sugar, and a taco shell.