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Change Tax Tack to Take Power Back
Is this the best or only way that taxation should work?
By Jean-Paul Gagnon Posted in Democracy, Democratic, Democratization, Economic democracy, Economy, Innovation, Philosophy, Tax, Taxation on May 13, 2020 0 Comments 5 min read
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Change tax tack to take power back

Short-essay, originally published by Eureka Street, 18 November 2013.

[Prior to writing this I was reading into the literature on “democratic economy” and “economic democracy” and got to thinking about the different ways we are conventionally taxed, predominantly (but not exclusively) in Australia. This led to thinking around lack of control over where, for example, my say sales tax contributions were being spent and what little accountability/transparency/control (from me, in the form of choice and consent to spend on x or y) there is in the system. I maintain that there is a case to be made of citizens and tax-paying residents to have control over where they want and do not want their tax contributions to be spent. It is not inconceivable to achieve this in practice, we need the right #civtech/computer engineers, economists, philosophers, moralists, politicians, and “disinterested” individuals from different expert-background (walks of life) to work together on this.]

A person’s usual engagement with taxes is that you pay them. You might do this through sales (goods and services) tax, your personal income tax, the capital gains tax, property taxes, or excise taxes. There are others. Most people also experience tax through that happy ‘eofys’ (end of fiscal year sale) moment when tax returns are usually due. You might even get some money back — more if you don’t have a HECS debt. For others, usually the less lucky, there is a third way of engaging taxes. And that’s through the audit.

These are the standard ways that citizens engage the public finances of Australia. Money gets paid, some of it might come back, but most of it is held in the treasuries of state and federal governments and then spent. But is this the best or only way that taxation should work?

But is this the best or only way that taxation should work?

Enter the TaxTrack idea. I’m currently working on this and first brought it up in my book Evolutionary Basic Democracy. The idea comes in two parts.

(1) The first is that you would be able to log in to a website online and see exactly where every cent of your tax money is currently held. You would be able to see when and where it’s spent and, importantly, who spent it (e.g. a ministry, public service office, or member of parliament). You might like to contact someone about this spending and you would be able to have a reliable contact method to reach someone in the right office.

(2) The second part of the idea— and this is where things get saucy — is that you would be able to choose what your tax money will and won’t be spent on.

It’s not inconceivable that individual citizens be given the chance to fill out a preference form online as part of their own personal, digital tax portal. You could choose to pick ‘below the line’ and individually choose what your tax money can and can’t be spent on. For example, you might like to only spend on funding public schools, the bullet train, hospital supplies and museums. You might choose not to spend on nuclear power plants, weapons development, or the automotive industry subsidy.

For TaxTrack to work you would need to have every cent of your tax money uniquely serialised according to your tax file number. You might even want to sport around a ‘tax card’ where you can ‘touch on’ before making a purchase at the shop to record your GST. Otherwise, if you can be bothered, you would have to hold on to the receipt. And there would also need to be an easy to use, but complicated to make, website.

The tax portal website is intriguing in itself. You could conceivably access recommendations from independent third party specialists if you are unsure what you’d like to fund, or would like to be more informed before deciding. Specialists from economics departments in Australian universities might recommend you spend on economic stimulus in order to avert an economic slowdown in bad global financial times. Or that you should fund research and development in renewable energy technologies to help the economy stay competitive.

TaxTrack raises some problems. Should you, and other citizens, be able to control what your tax money can and can’t be spent on? Is TaxTrack really something that can allow you to reengage the public finances of your country? These are conversations I think citizens should be having.

Some people would be nervous about this type of change. Australians might not be able to agree to fund a stimulus package in time to save the economy. Some areas that need public funding might slip because not enough people want to fund them. Some people might start demanding the right to have a say about whether Australia can double its debt-ceiling — it wouldn’t be hard to build this type of survey into the tax portal website.

Nonetheless there surely is much to be said for providing individuals with the means to easily see where their money is held and what it’s doing, and the right to choose what their tax money can and can’t be used for.

Jean-Paul Gagnon, 18 November 2013.

civtech democracy democrat democratic taxation democratic theory democratization economic democracy Jean-Paul Gagnon participatory finance tax taxation

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