When we started studying people paying their taxes we were kind of looking for a real pain
point that people have.
If you think about what’s the worst day of the year for you, often the worst day of
the year is when you have to write that extra check to the IRS.
And of course partly we hate it just because we have to give money away that we wish we
could keep, but we thought there might be some other underlying psychology going on
for why we hate paying taxes so much.
And if you think about it when you send that check off you kind of have no idea what happens
with it.
I mean you know it’s going to your state or federal government, but you don’t really
know what it’s being used for.
You look outside and you see roads and there’s some link between those in some way or another
but you don’t really know exactly what’s happening.
And that decoupling between what you’re sending in and what the output is is actually
pretty aversive for us, we kind of like to know when we do something what’s going to
happen as a result.
And so what we try to do in our research is recouple those two things closer together.
So imagine, for example, when you pay your taxes you write in the amount and then you
can allocate where you want things to go.
You could actually say I want more of my taxes to go to schools versus roads versus the military
or the reverse if you wanted to support the military more.
And the idea there was sure we still wouldn’t like paying taxes that much because we wish
we could spend our money on ourselves, but recoupling the cost and the benefits might
actually help us hate it a little bit less.
We’ve talked to a lot of governments, local governments, state governments, federal governments
in the U.S. and around the world about implementing this idea of recoupling tax payments with
the benefits that citizens get.
Politically it’s quite difficult, so you can imagine that if you talk about letting
citizens allocate all of their money wherever they want you might not get funding for really
basic things like infrastructure that aren’t really that exciting for people to think about.
So politically there’s a real risk to kind of opening up democracy where instead of taxes
going into a pool where elected officials decide what needs to be done, each individual
citizen has a voice.
One way we’ve tried to deal with that is to think about maybe you don’t need to allocate
100 percent of your taxes wherever you want, but what if I said at the end of the year
you know what, you’re going to get to allocate ten percent wherever you want.
So most of your taxes are still going to be the old way where they go into a general pool
and then the people we’ve elected who we in theory trust will decide where the money
goes, but we still as citizens get to say a little bit more about what we want to do.
And some cities in the United States have started doing this through something called
participatory budgeting.
And the idea there is that a city can take some tax money, it could be a small amount,
it could be a large amount, the city of Cambridge where I live has done this, and let citizens
vote for where that money should go.
So they’re not getting access to all of the tax revenue for the entire city, but the
city is saying we want to set aside some money where citizens can actually tell us where
it should go and we will follow through and make sure the money goes there.
And again, that helps citizens see that, it’s called participatory budgeting, they’re
actually participating and getting to make specific decisions about what happens with
their taxes.
One of the things that w'eve thought about are that taxes are big.
So if you think about changing the entire tax system that can be politically difficult.
It sort of changes the nature of the relationship between our money and the federal government.
But you can think about smaller sort of initiatives where it's not the entire tax revenue of an
entire city or a country, but you can imagine my colleague Kate Lamberton at Pittsburgh,
has shown for example that you can allocate your parking fines.
Where you get a ticket on your car and you're furious because of course you've parked in
the right place and it's unjust that you get a ticket...
what if even just on that parking ticket it could be twenty five or fifty dollars - even
there you might be able to say just a little bit on the margin I'd like the fee to go to
this in my city instead of that in my city.
Now you're not changing the whole political system of taxation, but you're still changing
the relationship between citizens and government on a real pain point which is of course you're
paying fines and fees that you've incurred, but I can now tell the city yeah it's true
that I parked in the wrong place and will now pay you but I'll give you a little voice
in where that money goes and I might feel a little bit better in now paying that.