Here’s an idea that’s been floating around the US left-wing blogs: the tax receipt.
The status quo is that the government takes a proportion of your income and spends it on your behalf, but the only way to figure out where your money goes is to go on-line and dig through the Treasury reports, which gives you a rough approximation. This way the IRD sends you out a statement at the end of every tax year letting you know what you got for your money.
Like everyone else who hears this idea I instinctively know that both our major parties would oppose this but I couldn’t quite articulate why. The DIA blogger at the Economist (linked above) has a theory:
The second possibility is that the parties aren’t risk-averse here; they actually place a positive value on denying the voters independent accurate information about how the government spends its money. Why might that be? It might be because political parties compete for power by shaping voters’ political opinions to their own electoral benefit, and they have more power to shape opinions when the voters aren’t getting this sort of information from neutral sources. They might oppose this kind of tax receipt because it diminishes their ability to act as informational gatekeepers between voters and government.
I don’t have that much of a problem with this, but I wonder about that “selected items” bit. The tax-payer paid $5400 in tax, but only $3250 of spending is accounted for. So, where did the other $1200 go?
Point being, if you only give part of the information, then isn’t there a risk of cherry picking the “good” spending and burying the “bad”? But if you give all of the spending, then won’t the receipt run to several pages long?
Comment by Andrew Geddis — October 15, 2010 @ 7:58 am
He means we could se how much goes on bullets and how much goes on education, and ideology would have to justify that.
Comment by Monkey Boy — October 15, 2010 @ 7:58 am
Of course, that’s just a ‘rough approximation’ too. It doesn’t show where ‘your’ money went, its just your tax bill divided into the proportion of revenue that the government spends on each area.
But you’ve given me an idea. I could create an excel doc to do create individualised tax receipts like you’ve shown. pretty straightforward.
Comment by Marty G — October 15, 2010 @ 8:00 am
It would also provide a powerful counter-propaganda tool, viz:
*
Social securityPaying bludgers to breed: $1040.70*
MedicareSubsidising lifelong bludgers: $625.51*
MedicaidSubsidising drug addicts and whores: $385.28*
Interest on the National DebtPaying for the profligacy of [previous administration]: $287.03*
Combat Operations in Iraq & AfghanistanFighting for truth, justice and the American way: $229.17And so on. This translates as: “[President] is paying 9 times as much to subsidise pludgers, whores and junkies as he is to promote truth, justice and the American way!” Which is already what happens to an extent, but it’s so much more readily apparent.
Because spending priorities don’t change that much between the usual moderate centre-left/centre-right governments, I think the main political opposition to such a scheme would be that it plays into the hands of radical factions within either main party, robbing the moderate factions of authority.
L
Comment by Lew — October 15, 2010 @ 8:07 am
“The tax-payer paid $5400 in tax, but only $3250 of spending is accounted for. So, where did the other $1200 go?”
And that’s why you should never ask me to do your tax return for you. $2200.
Comment by Andrew Geddis — October 15, 2010 @ 8:10 am
two dimes a year for salaries for elected representatives? Blardy good value.
Comment by Chris — October 15, 2010 @ 8:19 am
if this information is already in the public domain, why would parliament need to collate the publish it?
Comment by che tibby — October 15, 2010 @ 8:25 am
The employee tax receipt is a lie.
Employee earns $34,140 nominally but the employer will have paid for healthcare and payroll taxes already.
Cost (ie. Employee remuneration) to the employer is not $34,140 but likely to be in the low $40,000s. Because of government regulation the employee never sees anywhere near what he is really worth.
Major problem with hiring in the US now is with healthcare legislation employers can’t accurately cost taking on new employees.
Comment by Simon — October 15, 2010 @ 8:32 am
Interesting – wonder why this is a left-wing idea only? I would have thought the right would jump at exposing Govt spending (especially when the top 3 are apparently welfare-ish issues). Perhaps it is like Monkey Boy said – a lot harder to justify military spending.
Comment by Jordan — October 15, 2010 @ 8:59 am
Not PC has a link to the NZ Libz website with a similar tax receipt calculator. Bit closer to home.
Comment by pmofnz — October 15, 2010 @ 9:00 am
I agree with Andrew, it needs to give everything.
There is a danger that the list then becomes too long, but I would be fine with, say, the last few $100 being listed as “other*”. With some sort of website (or similar) being clearly and transparently available to give a breakdown of “other”.
As far as the US example. I think that a large proportion of the missing money must also be the money spent on military hardware and research. All that is listed seems to be personnel, and “operational” costs in Iraq/Afganistan. This will exclude stuff like buying tanks, drones, planes, air-craft carriers, submarines, nuclear missles. Which must all add up to something. It probably excludes military training costs too.
Comment by Richard — October 15, 2010 @ 9:12 am
Why does the Smithsonian cost so freaking much? It’s just the one museum, right?
Comment by Brad — October 15, 2010 @ 9:14 am
Brad,
No.
“the world’s largest museum complex and research organization composed of 19 museums, 9 research centers, and the National Zoo”: http://www.si.edu/
Comment by Andrew Geddis — October 15, 2010 @ 9:24 am
The Smithsonian has multiple museums.
“America’s national educational facility with 19 museums, 9 research centers and over 140 affiliate museums around the world.”
Comment by insider — October 15, 2010 @ 9:27 am
Smithsonian is a research organisation. Not just a public museum.
Comment by Richard — October 15, 2010 @ 9:30 am
The exhibits at the Smithsonian come alive at night and cause a lot of damage.
Comment by Pat — October 15, 2010 @ 9:34 am
Jordan, I would have thought the right would jump at exposing Govt spending (especially when the top 3 are apparently welfare-ish issues).
Polls like this one are probably something to do with it.
Majorities of people want to ‘cut spending’; finding a majority to cut spending in any given area though is much more problematic.
Comment by Pascal's bookie — October 15, 2010 @ 9:41 am
I would have thought the right would jump at exposing Govt spending (especially when the top 3 are apparently welfare-ish issues).
I don’t know – ‘the right’ would never dare cut super which is the largest budget item by far. They tend to rail against the ‘dole bludgers’, and that wouldn’t be such a topic of controversy once people saw what a tiny fraction of their taxes went to the unemployment benefit.
Comment by danylmc — October 15, 2010 @ 9:55 am
And am I the only one that would feel a bit of pride looking at my tax receipt?
If I got the receipt above, and saw that for just $28.09 a year I was helping to fund a frick’ SPACE PROGRAM; for just $38.17 I’d helped low income children get a better education than they would otherwise; and that for $1.12 I’d done my part to fund one of the greatest research institutions of all time, I’d feel pretty damn good about myself.
Comment by Jordan — October 15, 2010 @ 10:07 am
I lean libertarian (vote Act!) and this strikes me as a good idea – no matter what your political persuasion, more informed voters can only be a good thing. Now, if only there were information on how much certain policies cost you … (here I’m thinking of things like export tariffs etc., policies which most mainstream economists agree are bad).
Comment by Sturmgewehr — October 15, 2010 @ 10:16 am
1.I don’t have that much of a problem with this, but I wonder about that “selected items” bit. The tax-payer paid $5400 in tax, but only $3250 of spending is accounted for. So, where did the other $1200 go?
While it would be nice to develop a mysterious conspiracy theory around this ‘missing’ spending (over to you, Danyl)…
The truth will be much more mundane; it’s going to be an aggregate of all those other less than $0.19c expenditures that, had they been recorded too, would have made a receipt long enough to rival War and Peace for sheer printer-ink usage.
Comment by Phil — October 15, 2010 @ 10:51 am
“The exhibits at the Smithsonian come alive at night and cause a lot of damage.”
Shameful admission: I knew that the Smithsonian was made up of 19 different museums, but didn’t want to say I’d learnt it via cheap DVD night at Video Ezy.
Comment by Sam Finnemore — October 15, 2010 @ 10:57 am
I prefer the Jeffersonian, they solve more crimes.
Comment by JB — October 15, 2010 @ 11:42 am
The truth will be much more mundane; it’s going to be an aggregate of all those other less than $0.19c expenditures that, had they been recorded too, would have made a receipt long enough to rival War and Peace for sheer printer-ink usage.
A website link would go some way to solving that. Not all the way but it’d do.
Comment by Stephen — October 15, 2010 @ 12:15 pm
I seem to recall seeing something like this on a PAYE form in the early-mid 90s. Anyone know what I’m thinking of?
Comment by josh — October 15, 2010 @ 12:36 pm
The libz calculator is here: http://www.libertarianz.org.nz/taxcalc/
#1 expenditure is “Social security and welfare”. So, they don’t break it down by benefit.
#2 is “core government services”.
Comment by Repton — October 15, 2010 @ 1:04 pm
Sturmgewehr@20 – we have export tariffs in New Zealand? Really? Our exports are taxed? Really? But how does that affect my income tax bill as a tariff is an income for the government not an expense…??
You have me confusled.
Comment by Me — October 15, 2010 @ 1:28 pm
Just imagine all those New Zealanders getting a tax receipt in the mail saying “You didn’t pay for shit”.
Comment by OECD rank 22 kiwi — October 15, 2010 @ 2:00 pm
Yeah, stinkin’ pensioners, who needs ‘em? Just die already.
Comment by Repton — October 15, 2010 @ 2:21 pm
I understand the poor don’t have letterboxes.
Comment by Gregor W — October 15, 2010 @ 2:26 pm
1. Government applies tax/tariff.
2. People have less money.
3. People spend less money.
4. Economy shrinks.
5. Government doesn’t get enough money from tax.
6. Goto 1.
Conversely:
1. Government cuts taxes / reduces tariffs.
2. People have more money.
3. People spend more money.
4. Economy grows.
5. Government gets more money with the taxes it has.
6. Goto 1.
As government taxation approaches zero, economic growth approaches infinity. Only the malicious stupidity of our elected representatives is stopping us from attaining utopia.
Comment by Repton — October 15, 2010 @ 2:28 pm
“Only the malicious stupidity of our elected representatives is stopping us from attaining utopia.”
Well, in fairness, people do elect them. So people must be stupid, too. Or misinformed about the world. Is it all Danyl’s fault?
Comment by Andrew Geddis — October 15, 2010 @ 2:33 pm
I’m all that’s stopping you guys from immanentizing the eschaton.
Comment by danylmc — October 15, 2010 @ 2:35 pm
Dim-Post staff journalists are standing athwart history yelling meh.
Comment by Pascal's bookie — October 15, 2010 @ 2:39 pm
This is good news for Eric Voegelin.
Comment by Gregor W — October 15, 2010 @ 3:00 pm
“…for just $28.09 a year I was helping to fund a SPACE PROGRAM”
I know, isn’t that a bargain? I’d hand over my 28 bucks with pleasure.
Comment by Purple-Shirted Eye Stabber — October 15, 2010 @ 3:20 pm
The reason that the right in the US don’t like the idea of a tax receipt is because it shows how full of shit they are about cutting Govt. spending. The most expensive stuff benefits their angry white supporters and politically can’t be touched. The stuff they want to cut (foreign aid, Arts funding) costs two tenths of sweet fuck all.
I like this idea. For the US maybe they could put the ten most expensive things on it, plus each party gets to choose five other items listed. But it would also need to reflect the structural deficit in the US. (E.g. You paid $4000 in tax and the government spent $4500.) It would bring the whole discussion about government spending somewhat closer to, you know, reality.
Comment by nic — October 15, 2010 @ 4:19 pm
The main problem I can see is how you group stuff is very political. You could push a high-spending but unpopular item down the list by splitting it into much smaller portions.
Comment by Owen — October 15, 2010 @ 5:10 pm
Owen –
A problem but not an insurmountable one. Just have a non-partisan group like the CBO group the first things in the most logical way. If one party wants to split out a particular item or group together items, then that can be one of their five partisan items.
Comment by nic — October 15, 2010 @ 8:46 pm
i agree with OECD rank 22 kiwi.. “You didn’t pay for shit”.
Comment by Karno — October 16, 2010 @ 2:13 am
Owen – yes, the breakdown would be heavily politicised (as others have said).
The example tax bill shown above does it by cutting up military costs into four separate items, otherwise it’d be third on the list (at about $520).
Comment by Donald Gordon — October 16, 2010 @ 9:19 am
Local and regional government already does this, at least where I am (e.g. rates).
Comment by Grant — October 17, 2010 @ 7:17 pm