A New Tax System
From the time man has lived in society and has felt the need to organize his social relationships, government and tax, have been hand in glove. From the Tribal Chieftain & the Medieval Kings upto our grand Democratic Elected representatives, have all used tax to pay for the job of social organization and to a larger extent themselves.
Tax is what keeps the government in business. Tax is source of all power and power games. And Tax has not changed one bit from the age of the early overlords and Kings to our modern legislatures. The purpose is same, the method is same and the wastage is same as through all history. We have come from the Stone Age to the information age but one thing refuses to change ' the number and variety of taxes increase but the nature does not. The King took a proportion of the farmer’s produce; our Welfare State takes a percentage of our income deducted at source.
Fortunes have been squeezed out of the Billions who have lived from pre-history till now and all have been lost and squandered by the respective Governments on War, Corruption, Hoarding and Misuse.
What then justifies Tax? Why do people still pay it?
The answer is simple, there seems to be no better alternative for paying for social organization. How do we pay for roads? Schools? Police? Courts? Healthcare? And a zillion other schemes and needs that keep the wheels of society moving?
So Tax in a way has changed. From the force of the King it is now because of the social imperative that we pay Tax. It is implicit though; this sense of paying one’s Social Dues and still the Government extracts Tax on the basis of Force and not co-operation. Everyone pays Tax and no one pays it happily. The poor pay it with anger and frustration often trying to hide their already pitiful income and the rich grudgingly pay Tax having already manipulated every possible loophole to escape the Tax net as much as possible.
Why is that, everyone dislikes Taxes? Everyone wants the things Taxes are supposed to pay for but no one wants to pay the Tax. Is it because people are selfish, not wanting to pay their social dues?
No. It is because they don’t know what their Taxes are finally used for. Take an example: John has a child dying of leukemia. At that moment his heart bleeds for all the people affected by leukemia, he wants to help. As he walks down the road from the hospital, a mugger holds him at gunpoint and robs him of the $1000 he has in his wallet. The Mugger assures him, I am going to use this money for the benefit of leukemia patients! Believe me!
Do you think John would believe? Do you think he will feel any better about being robbed of his money because the robber promises to do good with the money?
He won’t. Because he doesn’t know if the robber will keep the promise. And even if he were to keep the promise, John will not be happy to lose his money because John will not get the satisfaction of helping other leukemia patients himself. He won’t be able to help them himself.’
We like to spend our money with our own hands. We like to budget and we like to plan how that money will be spent. And most people have the greatest satisfaction from spending money when they spend it for a good purpose. The present Tax system removes any possibility of the Citizen enjoying the fruits of the Social Good he does when he pays Taxes. He doesn’t even know where his money went. The present Tax system makes him feel helpless, powerless and at the mercy of a society which is intent on robbing a portion of his hard earned money! The Act that would otherwise have been one of the most rewarding has become the most unfulfilling. It has alienated people from their Social responsibility instead of binding them tighter in the social fabric. When I participate in doing something for the social good, only then can I feel the joy of it. When I decide what I want to do for society, I feel a sense of ownership for the society I live in. I am one of them; instead of they are coming for my money.
What is proposed is a simple change in the nature of Taxes.
The Government for the time being can continue to fix the rate at which we pay Tax but we as Citizens get to spend that money on things that we think are Socially important. Your money goes where you intend it to go. After all you earned it. You have a right to decide how it will be spent. Yes you owe a chunk of your earning to the society where you grew up and where you earned that living but why should some unknown faces deprive you from spending your own money on things you cherish or admire or feel for, or simply put on things, people and places you want to help. May be you have always wanted to help the homeless, now you can with your tax money! May be you have always wanted to fix those potholes in your neighborhood: now you can with your Tax money.
You direct the paying of your Social Dues. Through designated Govt. Agencies, through local self help groups, through NGOS and the monies that you spend on the social causes will reflect as Tax Credit!
The Government can allocate the Agencies through which you have to spend the money but it cannot take away your right to choose how to utilize every penny of your Tax money. In one Year the Government will know what the citizens want. No one will need a Hundred Thousand Budget Sub-committees to figure what to do with Billions of Tax Money; it would have already been utilized where the Citizens wanted it utilized. People will be happier. They will actively participate in the Social Good and phenomenal wastage of resources will be stopped forever. The Government will know within a Year where the Citizen’s priorities are. People will know where their society lags behind and next year they will adjust, they will give where Giving is needed because all humans are born with the ability to empathize.
We don’t need to be told what we should do for society. We know. We are Society.
Tax Payer’s Bill of rights
The most famous and prominent example is the state of Colorado. In 1992, the voters of the state amended Article X of the Constitution of Colorado to the effect that any tax increase resulting in the increase of governmental revenues at a rate faster than the combined rate of population increase and inflation as measured by the either the cost of living index at the state level, or growth in property values at the local level, would be subjected to a popular vote in a referendum. This applies to any cities and counties in Colorado as well as the state itself. Additionally, any “natural growth” in revenues that exceeded this rate was to be either earmarked for educational improvements or rebated to the taxpayers once an adequate reserve (”rainy day fund”) fund was established.
I see the experience of Colorado as an example of the positive effects of tax decreases. Look at the facts. Colorado’s economic growth in the dozen or so years since this system was implemented has been well in excess of that of the U.S. as a whole. Also deciding tax increases in referendums is more democratic, as legislators may be beholden to special interests and lobbyists. This makes it explicit that the voters are the best judges of how to spend what is, in the final analysis, their own money.
Philosophically, reduced taxation is a noble goal for its own sake, leading to increases in financial freedom and economic prosperity. Note that Colorado has continued growth as well as larger tax revenues concurrent with the TaBOR act.