Saturday, April 16, 2011

Your Tax Dollars at Work

Want a Receipt?

Taxpayer receipt
~ Seattle's Democratic "Congressman for Life" JimMcDermott has not infrequently been the subject of attack and ridicule for his unabashed liberalism. His latest? Issuing all taxpayers a receipt that shows exactly on what the federal government spends their taxes.

The core idea is to provide greater transparency and better information to the electorate which, for many years, has shown broad ignorance of where taxes go. It's not hard to get this information (e.g. here) but what McDermott's bill does is make the dollars understandable by using the same ratios on the amount of one's individual tax bill.

So, for example, on a combined income/FICA tax bill of $6,350, a taxpayer can see that $1,042.67 of his hard-earned income goes to the Pentagon, $829.75 to Medicaid, and so on.

What's instructive, of course, is not just how much goes to Social Security, wars, interest on the national debt—the large slices of the pie—but how relatively little goes to those things that are most debated. On that same $6,350 tax bill, for example, $82.55 goes to "International Affairs" (foreign aid) and $21.34 is spent by the Department of Energy. Salaries, benefits for Congress? Just 23 cents.

The proposal probably has little chance of succeeding. Some of the pettifogging comments suggest it will fall victim to the usual penny-wise complaints about its nominal cost, as well as the always fashionable demonization of the IRS and the cheap shots against those who make a living working there. These are not good reasons, especially when weighed against the value of educating people about the realities of the budget, the debt, and the deficit. The problem cannot be solved by cutting "waste, fraud and abuse" nor by eliminating support for public broadcasting, nor by gutting the EPA. A real look at the numbers show that those are ideological red herrings, and that real reform will require much harder work and tougher choices. It will not, as Bill Maher rightly lampoons, be simply removing the discretionary parsley from a budgetary plate piled with high-calorie program servings in portions we are so far unwilling to reduce.

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