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Make Elections More Taxing

This year April 18 is the end of the ordinary window for paying income taxes to federal and state governments. Paying income taxes may be a necessary part of civic life, but that payment should be timed and structured to promote government accountability. Unfortunately, but not surprisingly, our politicians have made it difficult for citizens to be conscious of how much they are paying for government services at the time when it would most count—election day.

First, the ordinary window for tax payments—from January 1 to April 15—makes the act of paying taxes a distant memory by the time the first Tuesday in November rolls around.  It does not take a behavioral economist to recognize that paying taxes closer to the election would make voters focus on whether they are getting value for money from government.  Thus, the ordinary payment window should be changed to the month before the November election.

Second, as a result of withholding, most voters get a refund from the government when they file their taxes.  This process also makes them less conscious of the tax burden, since most do not actually write a check to the government, but instead get a check from the government. Thus, withholding should be modified to make citizens feel the effect of taxes.

It might be objected that without withholding many citizens would not be able to pay the lump sum to discharge their tax obligations. If so, this inability would be a troubling fact about democracy: we trust people to determine who will dispose of other people’s money, when they cannot handle their own finances!  But even if withholding were not eliminated, cutting withholding by a half or even a third would help people be more conscious of taxes without requiring most to come up with huge sums of money for tax payments.

Taxes may be the price we pay for civilization, but they also burden liberty. Getting the right balance between government services and taxes is one of the most important decisions in a democracy.  Our tax system should be designed to help citizens make an informed one.

Reader Discussion

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on April 17, 2016 at 10:43:23 am

The 16th amendment did more to transform the federal government than any other single development in our constitutional history. And withholding turned the income tax into the potent revenue generator that it has become today. Milton Friedman had many good ideas, but the "negative income tax" was not one of them. "Earned income tax credits" are a mockery of civic participation. Everyone must have skin in the game.

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Mark Pulliam
on April 17, 2016 at 20:59:04 pm

First of all the United States is not a "democracy" but is supposed to be a Constitutional Republic. Next,over 1/2 the adult population pays zero Income taxes. Next,over half the adult population doesn't bother to vote. Next,over half of the adult voting population is either directly or indirectly employed by one level of government or living off of government welfare in one form or another. In other words most American adults are happy with the present system. The only people left are the shrinking productive Economic Class that produce the real wealth in America.
Finally,and most important,is the fact that hardly any of the revenue collected in the guise of Federal Income Taxes is spent on "the price we pay for civilization." Most,if not all,of the revenue collected goes to pay the interest on the National Debt. A debt that is out of control and unsustainable. Is it any wonder that when the Income Tax was first enacted 100 years ago that the Federal Reserve money monopoly cartel was created at the same time. In essence the IRS is nothing but the collection agency for the International Bankers that own our debt. A debt that has enslaved productive Americans for the next several generations.

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libertarian jerry
on April 18, 2016 at 20:15:57 pm

While we're at it, let's eliminate all taxes on business and tax only the people directly, since taxes on business are just passed along to the consumers. If the average taxpayer knew how much tax they were really paying there would be a revolution effective immediately!

I wonder what our real tax bill would be if we eliminated the middlemen. Wouldn't it be something relatively close to the gross government tax income divided by the number of taxpayers?

Let see ....

Average income reported to the IRS, about $53,000.

$3.176 Trillion in taxes / 323 million people = $9,833/person.

And, uh, let's not forget the deficit, which is also more tax (roughly $600 billion/yr).

$3.776 Trillion in taxes / 323 million people = $11,690/person.

Maybe a 20% of the people are too young or too old to pay taxes.

$3.776 Trillion in taxes / 258 million people = $14,647/person.

Now add state, local and other sundry taxes.

(cha-ching)

(cha-ching)

(cha-ching)

Oh, and let's not forget to add in hidden taxes in the form of businesses conforming to government regulations.

(cha-ching)

And you do use tax software don't you, since the tax code is too complex to understand. That's a tax.

(cha-ching)

And regulatory agencies do collect fees, which are more taxes.

(cha-ching)

Then add in Obamacare which is really a huge taxes collected through the insurance companies to pay for socialized medicine (which is why we aren't getting good raises to pay for all the new government).

(CHA-CHING)

What are we looking at here? Maybe $30,000 / person?

Then adjust for taxpayers who don't pay income tax (per jerry). We who pay income taxes are really getting reamed. There isn't a much left of our $50,000.

Isn't enough, enough?

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Scott Amorian
on April 18, 2016 at 23:15:24 pm

Scott.............Don't forget one of the most insidious and wealth destroying taxes of all. That tax is the inflation tax. Silently behind the scenes the devaluation of our currency from either overprinting or the creation of too much credit has destroyed much of the purchasing power of our medium of exchange. This is reflected in the increase of prices,overall,of many of our consumer items plus the destruction of the future purchasing power of our savers.

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libertarian jerry
on April 19, 2016 at 11:58:12 am

Nope!

Not while there are politicians hell bent on gaining office - and the proven way to do this is to "Promise her anything, but give her (Arpege) more taxes!
Of course, this does require a certain level of economic illiteracy in the electorate. "Let the Corporations Pay" -

Oops, it seems as if our educational system is doing a fine job in one area - we manage to achieve HIGH levels of economic illiteracy - so maybe, the Academy is succeeding in its goals.

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gabe
on April 19, 2016 at 14:45:06 pm

And the higher taxes on the wealthy, don't forget, are taxes on the rest of us. After the wealthy have so much wealth they are actually investment companies. How do these "investment companies with a human face" deal with their higher taxes? They pass them off to the rest of us through the businesses they invest in. The progressive income tax only hurts the middle class.

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Scott Amorian

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