Saturday, March 7, 2009

TAX TIME - a forecast for dollars and democracy

As I used TurboTax this year to file my 2008 returns I was mesmerized by the floating green digits in the upper right corner of the window. This number represented the amount of my money the federal government would return to me this year. This floating variable turned filing into a game where I, the player, tried to see how much a I could legitimately deduct to maximize that green number. What I find disheartening about this popular system of "doing your taxes" is the absence of social-consciousness. Of course the dollar amount of the return is important to each filer but the number that should also be highlighted and in bold is the amount of money the government will actually keep. If everyone were keenly aware of this number maybe they would feel a desire to see to it that Uncle Sam spend it wisely.

I had heard the IRS was going to write their own freeware to help taxpayers e-file with ease, but because of much lobbying TurboTax convinced them not to in exchange for offering their most basic service free to customers. I laud the IRS for attempting a threat on the free market of tax preparation swindlers and I think those eager software programmers over at the IRS might still have a future.

In the movie Stranger than Fiction the character Ana Pascal (played by Maggie Gyllenhaal) refuses to pay the portion of her taxes going to government works she feels contradict her moral values (i.e. IRAQ). Rather than not paying a portion of her taxes what if she lived in a world where she could tell her government exactly which government programs she'd like her taxes spent on? To serious politicians the idea of line item taxation might seem juvenile and silly but in reality there is no reason a program written by the IRS as an addendum to TurboTax could not be put into action.

Here is the idea...

After e-filing your taxes a window shows up with the amount of money to be kept by the government displayed along with two buttons. Button 1 says, "I give my federal representatives the right to decide how to spend the money paid by me in the form of Tax for the year ----." Button 2 reads "I wish to appropriate the money paid by me in taxes to the federal programs of my choosing." If the user clicks button 1 the return is filed and the user goes on having a pleasant Sunday. If the user clicks button 2 then a cascade of buttons ensues. The first page might say "I allocate X% of my total withholdings to -(a drop down list of all the departments of the federal government - defense, education, interior, etc. etc.) After passing this initial breakdown step the user would have the option of ending it or continuing to further breakdown precisely how they want their money spent. For example, say a person wanted their withholdings to go to research on Parkinson's disease they could theoretically go as far as allocating that money within the NIH. At every level of allocation the user would maintain the ability to stop and be done, allowing legislatures to step in and finish the decision making process for them. The degree of participation could be anything from 0 to 100%. What would be accomplished by this? First, a heightened awareness of what exactly the government does would permeate all who participate to even the slightest degree, and second and most importantly, this would provide real power to the people in prioritizing our national agenda. I don't know what this experiment might look like but I predict that defense spending would decline precipitously while investment in education, infrastructure, and agriculture would spike.

In the age of the internet this kind of people-powered taxation mechanism is possible. It is merely a matter of prying the power from the citadel in Washington where amassed power has grown to a sickening head over two centuries while our fledgling democracy has come into adolescence as a nation. If the founders knew what level of personal connection would someday come through this thing we call the internet they would have advocated a mechanism as I have just proposed. This mechanism fits soundly into the enlightenment precept that "Government can only be empowered by its citizens."

If you like this idea do what my grandmother always did, write your congress person and forward this article to anyone you think might listen by copying this URL into an email.

Your fellow tax payer

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