Give Me a Receipt Next Time I Pay Taxes
If Americans saw exactly how their specific tax dollars were being allocated, would it change the substance or tenor of discussions on, say, the debt ceiling?
One common misperception about how the federal government spends taxpayer dollars popped up last week during the president's Twitter town hall. In response to Obama's own query into cyberspace about what costs America should trim to reduce the deficit, Elizabeth from Chicago suggested we "stop giving money to countries that waste it."
"You know…" Obama began, tapping into the professorial tone he often uses to disarm political memes. "I think it's important for people to know that foreign aid accounts for less than 2 percent of our budget. And if you defined it just narrowly as the kind of foreign aid to help feed people and what we think of classically as foreign aid, it's probably closer to 1 percent."
If this were common knowledge among all the Netizens who retweeted Elizabeth's suggestion — if U.S. citizens generally had a more accurate sense of how much it costs to fund Social Security or what we spend per taxpayer on the arts, defense and veterans affairs — would it change anything about the tone or outcome of Washington's latest nasty fight over raising the debt ceiling? Would it enable both the public and our politicians to have a more productive negotiation?
"And I'm going to go out on a limb," he added, "and say maybe [the debate] would be more civil because it would be based on objective facts."
Kendall and colleague Ethan Porter lately have been pushing an idea for how to seed such facts in the public consciousness: a tax receipt. You get a record of your transaction with every other purchase you make, whether it's a new car or a cup of coffee. So, why doesn't the IRS send one? The very idea of a receipt implies that you've just gotten something for your money. And a basic itemization — Kendall and Porter suggest the receipt stick to a single page — could also tell you exactly how many of your taxpayer dollars go toward specific national priorities such as homeland security and the space program.
The little research that currently exists on the idea suggests that looking at such data won't change many minds about the basic size of government and the level of taxes people pay. Tax hawks aren't likely to realize they spend only $43 on foreign aid and suddenly ask to contribute more. And progressives are likely to find only more confirmation of their take on America's misplaced priorities when they see that the single largest line item (larger than Social Security) is national defense.
"More than anything, it will probably reinforce peoples' exiting values," Kendall said. But that doesn't mean this isn't a good idea. "The thing that's more important," he said, "is that a tax receipt would give people a chance to express those values. If you think that there's humanitarian need for foreign aid and you come across people who say, 'Well, we can't keep spending 20 percent of the budget on foreign aid,' you could whip out your handy dandy tax receipt and say 'Actually it's less than 1 percent of the budget.' Those types of extreme perceptions out there could be batted down."
There's also something to be said in a democracy for illustrating the real connection between tax collection and government services, between tangible programs and the abstract deficit debate in Washington, and between far-flung citizens and their federal government — all of which a tax receipt could help do. As Kendall and Porter wrote this spring in the journal Democracy, "government has become akin to a distant relative — one whom you hardly know, who shows up routinely with his hand outstretched, asking for a donation."
The logistics of a receipt wouldn't be that difficult, particularly in the digital age where most people now file their taxes electronically. The data already exists (in fact, as momentum for this idea builds, the White House put online its own version of a receipt calculator earlier this year). The main cost would be in mailing paper receipts to the minority of people who still file a paper tax return.
So no, Kendall says, we would not need a line item on the tax receipt detailing how many of your taxpayer dollars get spent providing you a receipt for your taxpayer dollars. "It would be negligible," he said, laughing.
The trickier question is exactly what to put on the receipt — how to balance the need to keep it short and clear with the specificity that's required to connect people to real-life programs. Jargon would be bad. Few people know what the Bureau of Reclamation does, but we all value "flood protection." Should more popular programs, like the National Park Service, make the cut, while funding for the Federal Election Commission not? Some research will be needed to figure out the best — and most nonpartisan — design. Everything else, Kendall and Porter suggest, should be available on a related website for taxpayers who want to drill deeper into the data.
More sophisticated future versions of the receipt could also give us an accounting of how much of the collective taxpayer pot has been spent on each of us. After all, much of the current problem of public perception is that not only do we not know how the government spends our money, we often don't realize when government spends money on us.
All of this raises one other question: Does Kendall think people will even open a tax receipt when it arrives in the mail (or email)?
He is quick with his answer: "No. You have a 50 percent open rate on anything, even the newspaper. How many people even open their magazines that they subscribe to?" (He suggests Miller-McCune not think too hard about that last question.)
But, he adds, this doesn't mean the tax receipt would be a failure. He suggests it would influence society in the same way writer Malcolm Gladwell has shown so many other ideas have. First, there will be the early adopters, maybe 5 percent of the population. Then, maybe 20 percent of people who receive the receipt will be "influencers."
"And if 20 percent of people read this thing and they were influencers," Kendall said, "that can extend the impact well beyond the people who actually open it."