Dearest reader, the great American statesman Benjamin Franklin once said, “But in this world nothing can be said to be certain, except death and taxes.” To tell you the truth I’m not certain about either. I have not experienced death but I do experience taxes. Although I may not be able to change death but I am willing to tackle the concept of taxes. Thus I propose a Voluntary Tax System so that Mr. Benjamin Franklin may have to eat his words in his grave.
A Voluntary Tax System, or VTS for short, is a very simple concept that I thought about a long time ago, and I surely hope I’m not the first or the last to think about it.
It is just what it sounds: you pay taxes if you want to and you don’t have to pay if you don’t want to. But let me start by saying why this might be a better system than the one we have by listing some of the faults of the current tax system.
First, doing taxes is a pain for the average American citizen and is not very democratic, considering the United States is perhaps the greatest representative democracy in the world, because most people outsource taxes to someone else, such as an accountant or to a paid computer software.
Secondly, not many people like to pay taxes even though some people often get refunds. The fact is that we don’t know if we are getting a refund for sure until the end of the grueling process.
Third, people debate too much of what is a fair tax system. Republicans nearly always want a tax cut and democrats nearly always want the rich to pay more in taxes. It’s always a continuing and tiring debate during the elections.
And lastly, I don’t see the point of paying taxes so that the government can use my taxes to fund the IRS to watch over me so that I do pay my taxes. But I still pay taxes because I feel obligated, not because it’s the law.
I believe the VTS is so much better than the current system that most people don’t even think about it, or just ignore the importance of it.
Here are some key points that I thought of regarding a VTS:
- Pay taxes only if you want to
- Be simple as three steps: filling out your name, your total income, that means everything you earned, and an amount or a percentage you like to pay to the federal and/or state governments
- Be transparent enough so that anybody can see how much you paid or didn’t pay, creating more incentive for the rich and the famous
I think these three characteristics make up for a good VTS that almost everyone can agree on.
The process should be so simple that it shouldn’t take you more than 2 minutes to complete. You have a webpage for just fillling out the three things I mentioned you need to fill out your contribution to society and another webpage for searching, or checking out, what other people have contributed.
I understand this is a radical shift from the current tax system but I believe it will work if it gets set up. Conceptually, we, the people, effectively control how much we believe our society should get in order to keep it going. We also get rid of the dreaded IRS along the way, thus saving money.
I also think that not everyone will like this. That’s fine, you don’t have to pay taxes then. We both won. But I do believe that about 99% of the U.S. population want to contribute to our society and they will make some form of monetary contribution. Also it just doesn’t look good to your neighbors that you didn’t pay your VTS when everybody else did.
The rich and the famous, like I mentioned before, will feel even more pressure to contribute or else they wouldn’t be famous among the people and stay rich.
I also think that this system will never fail. And I say it with absolute certainly. Because during my previous post about money, I realized that money is based on faith and it has not failed yet. The VTS will also be based on faith. As long as more than 50% of the population contribute then I think we are in good hands, I even think that more than 75% will contribute and probably more.
So I suggest we all do an experiment. The government, or some good samaritan, should ask every tax payer during tax time next year, how much they would like to pay taxes if given a VTS. Then we compare the taxes for current system and the “taxes” for the VTS and see which is greater. My bet this that both might be the same, but the VTS will give free will to the people, and that’s priceless.
We can experiment with this right now. Tell your family and friends about a Voluntary Tax System and see what they think. Facebook this page, Twitter this, email this. Do whatever to get the conversation started and we’ll see where we can go from here.
I simply spent more than two hours writing this and that’s enough for me at 4:38 AM on a Saturday.
Assuming there are a lot of people out there that will participate in VTS, do you think in tough economic times those same people will continue to give instead of saving it up for a rainy day? Plus, as bad as the obligatory system is now, I’m not sure that the solution lies in giving it all up. I (want to) believe in less radical reform. There are probably other more specific things I can say, but I’ll just leave it at that.
However, I do want to commend you for putting these thoughts out there. I think it can be a useful first step toward some interesting dialogue. Maybe it will be one step in a LONG succession of steps, but I don’t think there as many people willing to be as frank with their questions and ideas about economic situations like this (or political, philosophical, literary, etc). Keep it up.
Hey that’s a pretty cool idea Hiatt. Alicia sent me this article. Would you mind if I posted on riseuprochester.org? Perhaps you should contribute some of your articles like this if you’re interested. Let me know!
Omar, thank you for this great reply. First, I don’t know for certain if everybody will agree with me but if some people do then that’s great, if not then that’s OK.
Also I don’t think that we are in tough economic times, if you read my “Fundamentals of Money” you might realize that the possibility that we might not be in tough economic times as suggested by the mass media. I also think that rainy days are not long, there are more sunny days than rainy days so you don’t have to prepare as much as you think, although the more the better.
I also think that you are right about switching to a more radical system compared to the current one we have. That’s why I suggested someone should do a study and compare this system with the current system by doing a survey first. I like to think this as a social experiment rather than some must-do policy.
Again, I want to thank for your comment. It proves very helpful to me.
interesting idea. you know there was a story on cnn about a coffee shop using a voluntary payment system, where the customer would pay for their meals/coffee based on what they felt it was worth. they would have to look the register person in the eye, decide on a fair price and then pay it. this actually resulted in increased revenues for the store. however, for this tax system, i feel you would get different results. there is a large chunk of the population who pays very little to none in terms of taxes. they would not opt to start paying more. also there is a small chunk of the population who pays for almost half of total tax revenue and are taxed at marginal rates of almost 40-50%. they would almost certainly opt to pay less taxes. therefore, there would have to be a cut in spending on programs in order to make up the deficit. these programs almost certainly will benefit only lower earning segments of the population, who would certainly be against this sort of thing.
That’s a great point and something I have thought about, too. You are assuming that people are, perhaps, a little more selfish than they really are and thus are going to pay less. I’m assuming that people are more open and social, thus feels the weight of social responsibility. For example, if you are really rich then you should feel that your wealth is created on top of more people than if you were poorer, thus you feel the need to help out more people so that you may stay richer. That’s why I give the example that you might have more incentive to pay taxes if you know if your neighbors paid their taxes so you might feel a little more socially responsible.
Thank you for noticing and I thank Alicia as well. I don’t mind you posting my article at all on yours at all. Under “Note to Reader”, I specified that everything I write to be under Creative Commons Attribution-Share Alike 3.0 license and the important thing is that I would like for you to attribute when you share. I would like to contribute to similar websites such as yours but I realized that I have too many things on my plate thus I will not be a good contributor. You are welcome to permalink my site with yours if you feel that mine is worthy. Feel free to also subscribe to my RSS feed as I try to write short posts on Tuesdays and longer ones on Saturdays.