Warren Buffet recently published an op-ed arguing for higher tax rates on the ultra-rich, on the grounds that many of them pay effectively lower rates than the average American and that they’d be happy to do their part to help our country.
I think the sentiment is right but the approach is all wrong.
No one likes being told to pay more money. It’s a basic fact of human nature that people resist coercion. But what will lead to tax evasion when taken by force will often be willingly granted with the right kind of appeal.
Instead of making paying taxes an obligation, make them a competition. How much are you doing to support the federal government? How much is your neighbor doing? Let people opt-in to making their total contribution public, and give them the option to pay more than the legal minimum, then put up a nice website with a leaderboard, build a facebook app to let you put a badge in your profile, and let human nature take care of the rest.
If you haven’t visited Kickstarter, it’s a dramatic demonstration of the effectiveness of combining the traditional patronage model for the arts with a web 2.0 interface, moving the power to support artistic projects away from the wealthy few and into the hands of the people. Taxing the rich will help solve the national debt problem; getting everyone to chip in to the amount they are able will knock it out of the park.
Kickstarter succeeds because it recognizes that people want something in it for them. When you donate to a Kickstarter project, you have the satisfaction of helping bring a new thing into the world, but in addition to that, succesful project creators offer their donors various project-related perks based on the amount of their contribution. Likewise, contributing to the U.S. Treasury, you get the satisfaction of knowing that you are helping keep the roads paved, our borders safe, and the national debt paid off, but I also think it wouldn’t hurt for the government to offer personalized incentives as well. Here’s some suggestions:
Paying annual tax of:
$1 – Your name gets put on an acknowledgments list that can be obtained by filing a FOIA request
$5,000 – Invitation to an annual taxpayer’s ball, hosted in major cities across the country on Apr. 15. Open bar.
$10,000 – One “get out of jail free” card good for one municipal traffic violation
$20,000 – Free access for a year to every national monument, park, and museum in the country
$40,000 – Limited-edition gold-plated U.S. Treasury pen
$200,000 – Two-night stay in the Lincoln Bedroom
$400,000 – One “get out of jail free” card good for one misdemeanor or minor felony
$1,000,000 – Catered luncheon in the Capitol for you, two guests, and two senators of your choice
$2,000,000 – U.S. military will rescue you if you get trapped in a 3rd world country
$10,000,000 – Your face goes on the penny
Side-note: Although this isn’t heavily promoted right now, you can actually donate to help pay off the national debt today! Pay here via credit card or direct transfer from your checking account. My big question with this form, though: are donations tax-deductible?