What if taxpayers had a say about the budget?

A question from Yahoo! Answers:

What would happen if people had a say in where the tax they paid was to be allocated?

I mean, a lot of the time people say ‘oh, I don’t want my tax money to go towards this cause, or that cause’, but could you get a workable system whereby people could say what they wanted their money to go on? For example, if I didn’t want any of my income tax to find it’s way to the military budget, I’d be able to tick a box barring that from happening, and so on and so forth… if I didn’t care where my money went, I’d just leave it open… What might be the consequences if everyone could do that?

One consequence would be a huge increase in advertising by government agencies and contractors. Every agency would go out of their way to convince the taxpayers that it is the one that has to get funded.

Social Security and Medicare could get blackballed altogether, since they do not benefit the majority of current taxpayers directly.

There could also be some corruption. Payroll taxes and corporate income taxes together account for about 45% of budget receipts. So government officials and contractors for government agencies would have an incentive to bribe managers of large corporations to ensure continued funding of their agencies.

Finally, everyone would be reluctant to enter into any sort of long-term financial arrangements with the U.S. government. Say, you bought a 20-year Treasury bond last year, but this year taxpayers said the Treasury is not to pay any interest on any bonds…

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