How to Spur the Economy and Further Democracy: Democratic (opt-out) Tax Programs

I hear the cries of the supposed 99% (OCCUPY) folks. I’m in the 53%, the group of Americans that pays Federal and State income taxes. On top of that (like many Americans), I pay property taxes, gasoline taxes, sales taxes, and countless other government fees (including those 9/11 security fees on plane tickets). There are taxes upon taxes that I’m paying… and more taxes on top of all that.

While I think we should be on a bond-only system for funding our government programs, there’s an interim solution to getting there. One that wouldn’t be so radical: opt-out taxes. I’m not talking about being able to opt-out of Federal income taxes like my friend Jimbosway is likely to support. I’m talking about giving tax payers the right to opt-out of funding Federal programs with their tax dollars.

Where The Money Goes

This doesn’t mean you get a tax refund right away and the government losses all it’s money because nobody is going to want to fund any program. It just means that your tax dollars don’t get spent on something you don’t want them spent on. For example, if someone wants to not fund farm subsides for sugar in Florida, they opt-out of that program. If someone doesn’t want to fund NPR, opt-out. Etcetera.

We could even take it a step further and allow someone to change their funding from say sugar subsides to NASA, so NASA would have additional funding. You’d have to lock in your choices for a year at a time. This way, each program will know what it’s budget is for the coming year.

Now, what happens to the opt-out money? Well, let’s just face it. That’s a problem we’re not going to have to worry about for another $1+ trillion dollars. However, eventually, there could be a budget surplus as government programs are defunded. There’s nothing wrong with a government surplus. When that happens, and if it runs surplus long enough then the government will know how much money each taxpayer should receive back. That’s pretty simple and fair.


This will also put a tremendous amount of accountability onto the shoulders of US (that’s an emphasized us, not United States – well, United States citizens…) If we don’t want to support programs like TARP and bailout programs, we don’t fund them. Now, people will say things like: TARP was an emergency. We couldn’t wait a year to get that funding. I’ll just laugh at that argument. Unless you were John McCain, you saw it coming!


Another HUGE benefit of this is that it would give us massive government transparency. Rather than transparency being a punchline in an Obama speech, it becomes a reality! We’ll know what programs are receiving how much funding, and more importantly we’ll know what the hell the programs are! If someone is spending your hard earned money, don’t you think you should know where it’s spent? It’s not like the government agencies need to send us postcards or pictures of the kids we’re helping like a charity does. But we will at least know that our money isn’t going to fund a program that we don’t support.

Technology has advanced significantly over the last few decades. Yet, our political system and taxes are way behind on utilizing technology to better themselves. We can create and easily maintain massive databases that would house this information and allow our budgeting to be based upon democratic taxation.

Other Ways the Government Can Still Steal Our Money

And Congress members who love to spend money like it’s going out of style need not fret. They can still work on pork belly programs! Pass whatever spending they want with the existing methods they now have. Fund it just like they do now. If we the people decide to provide them with the funding, the program can continue on. If we don’t, the program dies.

Congress could also go about imposing “fees” instead of using income tax dollars. Just look at your cell phone bills or airplane tickets to see examples of those. They could go about imposing other use taxes (perhaps a national sales tax, since they’re already talking about it anyway).

None of these worry me because if we did have an opt-out system in place and Congress did try to go about stealing more money from our pockets, we’d be more educated about what is going on with our government on a greater scale than we do know. We’d have a much greater vested interest in where our money is being spent/wasted. The second Congress tried to implement a national sales tax or additional fees, we’d put a stop to it.

More Accountability

I also think that our greater involvement with the spending of our taxes dollars would turn the tables on today’s political thinking. Right now, Congress can just go pass any spending bill they want without much accountability to their constituents. With an opt-out system in place, Congress is going to have to go back to the people they serve and ask them to support their decisions. Congress is going to have to explain why they’re voting yes on spending more money. Opt-out make Congress accountable to the people they serve!


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