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Bill Harrison


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How can we re-frame tax policy to make people happier about paying taxes and/or spending pro-socially?

We already require people to pay taxes, both for their own good and for the good of society as a whole. Michael Norton's talk, everyday experience, and our tribal evolutionary history suggest that pro-social spending makes us happier. Yet, many people hate paying taxes, possibly (as per Rory Sutherland's talk) because of the way tax policy is perceived or structured, or because they hate the lack of control as to where their money goes.

If you think social policies should be structured in such a way as to give the greatest happiness to the greatest number of people, then is there a way to structure tax policy in such a way to make people happier about paying taxes and/or spending pro-socially?

For example, maybe allowing (or requiring) people to pay some percentage of their taxes (beyond what they pay to the general fund) on some pre-approved set of necessary social programs, but allowing people to choose which ones, could be a policy that would promote pro-social behavior, and thereby produce happier and tighter-knit communities, nations, etc.

Such a policy would, in fact, be less restrictive than either taxation or education, both of which we already require. We don't allow selfish behavior (not paying taxes, remaining ignorant) in either of those cases, because we understand that pro-social laws and policies are necessary for society to function at all.

Policies like this are particularly necessary right now in the US, for example, where the country is extremely divided politically. This could also get the Mitt Romneys of the world to gain an appreciation of the interdependence that allows them to become and remain wealthy.

So, given that pro-social spending makes people happy (a la Michael Norton's talk) and given that re-framing where money goes can make people happier about paying money (as per Rory Sutherland's talk), how would you structure taxes so that people would be happier about paying them?


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    May 9 2012: Some others have already mentioned giving individuals some control over their taxes, but let's take it to its logical conclusion.

    To make people happy about paying their state and federal taxes, give them full control over where that money goes. Complete control. Let's say citizens receive a list of issues, projects, and initiatives. They then write in a percentage they would like to put towards each issue (yes, 0% is an option). However, they must still pay the same amount of total taxes.

    With citizens able to choose where all of their taxes go, we can speculate on a few results:

    1) Some crucial public projects would go underfunded and fail.
    2) Taxpayers would be happier. They would have the power of choice, after all!
    3) Politicians and government workers would have to find other jobs (after all, who would assign a percentage of their taxes towards governmental wages? [just a joke, I swear!] )

    There is no chance of this system being implemented any time soon, but it's a nice thought! However, it doesn't take much to improve on our current system of taxation: "Put the money in the bag, or else! And I won't tell you what I'm spending it on, either!"

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