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Originally posted by Ulala
I'm not keen on direct democracy, as advocated by the OP, nor keen on this ticklist of items you may or may not choose in your annual tax declaration. For one thing, how would you control the items on that ticklist ? I may want our country to be defended ... but I might also object to expenditure on nuclear weapons ... or B2 bombers at $2 billion each ... but I might support the development of a new battle tank. I might object to welfare checks for some, but might approve for others. That list would be endless.
And whilst there's no doubt an electronic mechanism might have its novelty value, how many people on coming home from work are really going to devote their precious free time studying the issues involved or even pressing a Yes/No button ? After a few months, the only people left playing would be the same ugly people for whom politics is their hobby and the same ones who pull the strings today.
The concept is simple in theory, but perhaps more complicated in implementation. However, if people can file taxes, than they can just as easily do this. In fact, they may even find a personal interest in doing so, as it promotes their own wishes, and makes their voice heard. It would essentially operate much like the IRS does now (ironically), in that people would be filing tax consent forms to the Fed, state, and local governments, with each new budget cycle. The Fed, states, and local government would publicly submit their budget proposals, and proposed spending initiatives before each budget cycle. The public (those who give a #), would than review these proposals for a period of time, before their tax consent forms were due. Based on the public’s feedback, budgets would be created on a strictly popular vote basis. Some of the items would be shorter term, and others longer term. The longer term issues would naturally be of the most importance on any given consent form. The form itself would essentially be a checklist of items presented to the taxpayer. The taxpayer would be able to indicate the level of importance they lend to each item, possibly by use of the old “on a scale of 1-5” format, which would dictate the amount they deemed fit to spend on it….or…. they could check “unsatisfactory”, indicating they have no interest whatsoever in having their tax money being spent on that item. If implemented, the American people would be so jaw-dropped by the long lists of frivolous spending, that it would be cut short in a very small amount of time. Almost sounds too simple, doesn’t it?….. Well, so simple, I think it would work.
- Charles B. Petzold
In taxation a taxpayer wasn't given a choice in what services to pay for. Somebody else chooses on behalf of the payer without his/her explicit consent as to what services to pay for, even if the payer does not use that service or believes against that particular service. If it were possible to track where exactly a taxpayer's tax money goes, the taxpayer could pay that entity directly. However, besides the logistic difficulties of this proposal, a country's inhabitants routinely benefit from non-excludable goods or services, such as national defense or infrastructure. This is discussed in greater detail in David Osterfeld's paper "Social Utility" and Government Transfers of Wealth: An Austrian Perspective.
Currently, in excess of 50 percent of the budgets of practically all governments in the world are devoted to transfer payments. This makes wealth transfers, at least quantitatively, the most important function of government. The official justification for these activities is that they increase "social utility." Since transferring wealth from some individuals to others reduces choice sets of the former while expanding them for the latter, this means that some are forced to choose between options that provide them with less utility than those they would have chosen on the market, while others are able to choose from options that would not be open to them on the market. Since the utility of some is reduced while that of others is increased, any claim that social utility has been increased implies the ability to compare, if not measure, the utilities of different individuals. Thus, the justification for wealth transfers clearly implies the use of utility in its cardinal sense (Simon), defined here as the ability to measure and/or compare the utilities of different individuals. Those who maintain that wealth transfers can and do increase social utility should be able to support this claim with adequate evidence.
The results of the foregoing are interesting. One may say with certainty that the market always increases social utility. On the other hand, one can never state with certainty that any act of government ever increases social utility, and the only conclusion one could ever make with absolute certainty is that a given act of government reduced "social utility." And this, as we shall see, is not as unlikely as might be thought.
This means that it is impossible to ascertain whether a given government action increased or decreased net social utility or left it unchanged.
One of the chief underpinnings of public choice theory is the lack of incentives for voters to monitor government effectively. Anthony Downs, in one of the earliest public choice books, An Economic Theory of Democracy, pointed out that the voter is largely ignorant of political issues and that this ignorance is rational. Even though the result of an election may be very important, an individual's vote rarely decides an election. Thus, the direct impact of casting a well-informed vote is almost nil; the voter has virtually no chance to determine the outcome of the election. So spending time following the issues is not personally worthwhile for the voter. Evidence for this claim is found in the fact that public opinion polls consistently find that less than half of all voting-age Americans can name their own congressional representative.
Public choice economists point out that this incentive to be ignorant is rare in the private sector. Someone who buys a car typically wants to be well informed about the car he or she selects. That is because the car buyer's choice is decisive—he or she pays only for the one chosen. If the choice is wise, the buyer will benefit; if it is unwise, the buyer will suffer directly. Voting lacks that kind of direct result. Therefore, most voters are largely ignorant about the positions of the people for whom they vote. Except for a few highly publicized issues, they do not pay a lot of attention to what legislative bodies do, and even when they do pay attention, they have little incentive to gain the background knowledge and analytic skill needed to understand the issues.
Public choice economists also examine the actions of legislators. Although legislators are expected to pursue the "public interest," they make decisions on how to use other people's resources, not their own. Furthermore, these resources must be provided by taxpayers and by those hurt by regulations whether they want to provide them or not. Politicians may intend to spend taxpayer money wisely. Efficient decisions, however, will neither save their own money nor give them any proportion of the wealth they save for citizens. There is no direct reward for fighting powerful interest groups in order to confer benefits on a public that is not even aware of the benefits or of who conferred them. Thus, the incentives for good management in the public interest are weak. In contrast, interest groups are organized by people with very strong gains to be made from governmental action. They provide politicians with campaign funds and campaign workers. In return they receive at least the "ear" of the politician and often gain support for their goals.
In other words, because legislators have the power to tax and to extract resources in other coercive ways, and because voters monitor their behavior poorly, legislators behave in ways that are costly to citizens.