Here is another piece of my platform for when I run for office:
I hereby declare that all taxes must be paid explicitly either by check or electronic funds transfer. I hereby declare it illegal to automatically have taxes deducted from paychecks, business activities, profits, or any other income stream that is used to collect taxes.
Note that this again satisfies my requirements for me to sanction a proposal: that it improves incentives, moves in the direction of the Rule of Law and cannot be on its face accused of being partisan. Notice that this policy does all three. I am NOT proposing a reduction in taxes or in any change in who pays taxes or any deductions or exemptions. All I am changing is the means of payment.
This proposal should seem to curry favor with the behavioral economists (who talk about framing effects as causing irrational decisions) since consumers quickly adjust to having taxes automatically withdrawn from their paychecks, they may not even be aware of how large their tax burdens are – and are also unlikely to be aware of changes to taxes as well as if they were writing checks each month to pay their taxes. If the goal of the “Nudgers” was truly to improve consumer well-being, I’d like to see serious thought given to this proposal. I am sure they can figure out ways to deal with the added costs of collection and the incentive problem here.
Do I believe this policy would have an impact? You bet. When people consciously write checks for things, they are much more attuned to the magnitudes of their commitments. This program would have to put pressure on the political process to be more transparent and more efficient, especially when combined with our next policy proposal idea. Will this one have a snowball’s chance in Hades of passing? Nope. But it ought to be a standard to which we have policy move toward. I’d like to see reasonable defenses against it that do NOT at their core argue, “but revenues might fall.”