Friday, October 01, 2010

Tax reforms - Ezra Klein makes a valid suggestion

Ezra Klein comes around to the idea that I have been talking about for years. He argues that we should get a receipt for our taxes.

A tax utilization break-up
While the general budget does give a broad outline, person specific contributions should be a right of the citizenry. Ezra draws similarity with food ingredients and calorie break up. To take the analogy further, government budget is equivalent of stating national food ingredient and calorie consumption. It makes little sense to the individual. We should get a break up for how our taxes are allocated.

Individual tax allocation choice
I often think about giving the choice of allocating tax dollars to the individual. I believe, in a sense, it will be a pragmatic manifestation of democracy. Embedded within this idea are two critical ideas.

First relates to relation between democracy and empowerment. A first principles analysis suggests that democracy is about empowerment of the masses. Our recent iteration of democracy is masses empowering the government. There is a substantial difference in these two points of view. 

The idea refers to the differences between masses and government. Our iteration of democracy views masses (or citizenry) and government as two separate agents. The result of this differences is evident in intellectual differences in opinion of masses and those of government.

Further more, government is now a seat of power and thus no different from the monarchs and nobles of yore. The first principles seat the power at the hands of the people. It creates government as an agent to exercise this power. Government does not acquire but borrows the power from the people to enable people to exercise their mind and opinion.

The second idea relates to the (wrongful) importance of keeping tax policies away from citizens. Governments, like monarchs and nobles before, believe people do not want to pay taxes. They have no qualms in believing that these same people will understand credit card statements easily. I do not agree with this point of view. I believe, if we trust the citizens to allocate taxes we may get a fairer spending that may actually benefit the citizens.

I believe, by taking away the ability to direct taxes from the citizens, government is limiting democratic rights. Years ago, before the advent of computers, it was not possible to allow citizens to take this responsibility. However, current technology that allows these same citizens to vote in American idol based on performance, can be used to allow citizens to make these important choices.

In sum
Sometimes, by giving responsibility to citizens, we may make them responsible. We can also foresee a possible disaggregation of governments into policy designers and bureaucracy. We do not need to career politician as a policy designer.


I discuss governments and taxes in my book "Subverting Capitalism & Democracy" is available on Amazon