Income TAX earmarking

Tax earmarking gives taxpayers the ability to allocate their tax liability to specific government agencies, programs or initiatives. Also referred to as "tax designation", this system provides an optional form for taxpayers when completing their taxes that allows them to direct a portion of their tax payments to particular areas of government spending, effectively specifying how their tax dollars should be used. This concept allows taxpayers to have a say in the allocation of public funds and the prioritization of  government programs or projects that align with their preferences and values.

Part of living in a community means each individual is expected to contribute to the larger community's well being. In small villages, that might mean help your neighbor build a barn or to help dig a shared well. In modern society, governments collect taxes that pay for shared resources like roads, schools, military defense, or social safety nets. The important point is that everyone contributes. 

While the majority of people are comfortable letting their elected officials decide how to spend the money, many Americans have strong feelings about how their tax dollars are being spent. Like the villagers, they want to have more say in how they contribute. And, if they feel their taxes are not being spent in a way they like, they resent paying taxes and resent the government for spending "their" money incorrectly.

Tax earmarking does three things for our democracy. First, and most importantly, it allows individuals to feel more positive about the income taxes they are required to contribute. An individual concerned about the environment might want to allocate their contribution to the U.S. Environmental Protection Agency (EPA) Another individual might be mostly concerned about our military readiness and would allocate their taxes to the U.S. Defense Department. Allowing people to direct their tax money to things they value might might make people less angry with their government.

A second way tax earmarking could make our democracy better is by distributing some power away from our representatives and to ourselves. Americans could let their priorities be known by funding the things they value. Just like when we cast a vote during an election year, each tax season, voters would get a chance to vote with their wallets. 

The third way tax earmarking could reinforce our democracy is by better informing Americans how their taxes money is being used. Because the power of the purse is held solely by our elected representatives, only they are broadly informed about the various agencies and programs in the budget. Agencies (and lobbyists) make their cases to elected officials who make the spending decisions. If these same agencies and lobbyists were trying to convince taxpayers that their program was beneficial, taxpayers might become better informed about the positive impact of their tax contributions. 

People should feel good about their contribution to our collective success. Income tax earmarking could shift how we all think about taxes.

Each year, taxpayers fill out tax forms adding up how much they have earned and subtracting any deductions to calculate their tax liability (the amount of income taxes they are required to contribute). In a tax earmark system, taxpayers would have an additional optional form they could complete that would list the agencies they wanted to allocate money to and how much they want to allocate.

Characteristics of a tax earmark system:

• Taxpayers may allocate up to 50% of their total tax liability, with the remaining balance being allocated to the general fund to cover essential government expenditures.
• Taxpayers that do not allocate will contribute to the general fund.
• Taxpayers can allocate to any eligible program. The list of eligible programs is maintained by the Department of the Treasury.
• The total revenue collected by the government shall not be reduced as a result of taxpayer allocations. Any shortfalls due to allocations shall be covered from the general fund.

Here are some links that can tell you more about ranked choice voting:

• Wikipedia - Where is ranked choice voting used in the U.S.
• Fairvote.org - Promoting RCV and other reforms
• Time Magazine - "It could help prevent ever more polarized election campaigns, increase the number of women and minority candidates running for office, and  reduce negative campaigning."
• The Economist - "A simple reform might fix America’s dysfunctional politics"