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One Simple Idea Could Revolutionize Our Tax System

Robert Dimuro

Posted on May 19, 2019 09:17

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This idea would bring representation back to the American people, but since it would also threaten Congress's power of the purse, it will likely never see the light of day.

The American people are justified to be outraged by our tax system. The federal government’s annual tax revenue is estimated to exceed $3.4 trillion by the end of fiscal year 2019. This is an unfathomably large amount; yet our government still manages to amass a deficit of about $1 trillion each year.

Moreover, our taxes are being wasted on hundreds of government agencies (the exact number of which isn’t even known), unnecessary overseas missions and military outposts, and programs and initiatives about which the people know little and also have no input.

Nevertheless, Congress continues to approve annual budgets that fund programs, agencies, and missions that overstep its own authority and, therefore, the authority of the people to have a say, through their representatives, in how their taxes are spent. Once again, it seems we have entered a time in which there’s taxation without representation, a situation against which the founders thought they had safeguarded when they penned our Constitution.

Although far from perfect, I have a simple idea that would negate many of these issues. It’s an interactive way to file taxes that allows the people to decide how their taxes are spent. Since Congress has shown that they are incapable of handling this task in a responsible manner, why not delegate the responsibility to the taxpayers?

One way this system could work is that a form could be issued to the taxpayers that itemizes sectors of need, such as various types of cancer research, organizations that help the destitute, infrastructure projects, the military, etc. In theory, groups and subgroups on this form could reach into the thousands, and the role of tax preparers could be to work with their clients in helping them decide how they want to diversify their taxes.

To aid taxpayers and accountants in the decision-making process, the government can also publish data each tax season that indicate which sectors are over- and under-funded. If there’s an organization that people largely don’t wish to contribute to, such as Planned Parenthood, then so be it. Conversely, if the people want more of their taxes to fund space innovation, then NASA would receive greater funding than it currently does.

An added benefit to this system is that it eliminates the need for many government programs such as Social Security and Medicaid. Instead of funding wasteful and inefficient bureaucracies, the people can directly fund private nonprofits that provide financial support for the elderly or healthcare needs for those in poverty.

You can imagine an entire industry centered around this system, with companies and nonprofits lobbying the government to be included on tax forms, creating advertisements to encourage taxpayers to fund their specific causes, etc. Although it will likely never happen, this would be a healthy way for people to prepare their taxes. It would cut through government waste and unaccountability, efficiently help more people in need, and keep the government from amassing huge deficits each year.

Robert Dimuro

Posted on May 19, 2019 09:17

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