Thursday, April 19, 2007

Personal Tax Earmarking

Lindsay over at wiseGEEK sent me an article to look at which I found interesting. (As an aside, as this blog has grown, I've been receiving emails directing me to certain articles, and I just wanted to thank you all for taking the time to send them, even if I don't get a chance to write about them)

The article she sent me discusses the idea of personal tax earmarking - basically, having control over where your taxes go. Initially, this sounded like a great idea. I get to choose where the government spends my money? Heck yea! I could earmark my taxes for the maintenance of the trails in national parks instead of the social security which I will never benefit from! I could provide even more money for the Big Dig...... or not. Plus, I believe in the benefits that the article touts - more people would pay taxes because they get to direct where their money goes. I think many people, especially the rich, are averse to paying taxes not necessarily out of greed, but because they think they know a better way to use it. Given the long list of pork barrel spending on each budget, I can't disagree.

My worries, however, are this. What system is going to be able to handle such a complex distribution of money? Each person can earmark their taxes for one of thousands of causes, or they can divide their taxes up however many ways between thousands of causes. Multiply that by the millions of taxpayers in this country? The government is already getting flak for the numerical nightmare known as Medicare Part D - the prescription drug benefit - and that's only 400 or so choices. Imagine thousands of choices and permutations. I have little faith that the government would be able to handle something of such complexity given its track record. And given the government's recent push to simplify taxes, I think idea would be heading in the opposite direction.

Nice idea, but probably not feasible. Is it just me or am I becoming a cynic?

Article: What is Personal Tax Earmarking?



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Blogger Mountaineer said...

I have thought this would be a good way to do taxes for a long time. There are a number of things that my tax money supports that I completely do not agree with. It might complicate matters a little, but I don't think it would be all that much.

How about gradual earmarking? Allow people to earmark, say 10% up to a certain amount to start and see how it works?

My concern with such a system would be that some essentials (such as fire department, police, or military) might not get the support they need. Of course, such things might get a whole lot more support than they do now. I think it would be interesting to see what might happen.

April 20, 2007 at 7:55 AM  

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