President Clinton has declared that the era of big government is over, but just add up your federal taxes and youll know something is fishy. Thirty years ago, when Lyndon Johnson occupied the White House and the government was fighting the Cold War, the Vietnam War, and the War on Poverty, federal receipts were about 19 percent of gross domestic product. Since then, real GDP has more than doubled, the Cold War has ended, the Republicans have gained control of Congress and--strange to say--federal receipts are about 19 percent of GDP.
Somehow, the peoples desire to curb government has failed to get through to their elected representatives. No matter how much the economy grows, federal taxes grow just as fast, even though the federal governments primary constitutional duty--military defense against foreign threats--has become much less costly.
Since the late 1970s, many initiatives and referendums at state and local levels, from Californias Prop 13 to the tax limitations approved in California and Florida in the recent elections, indicate that when the people have an opportunity to place bounds on taxes, they often vote to do so.
But Congress faces no such explicit limit. Democratic as well as Republican members claim to favor fiscal restraint. When the time comes for action, however, their desire to increase financing for their favorite programs dictates that they keep widening the flood of revenue--now about $4,400,000,000 every day--streaming into the Treasury.
Voters have little ability to stanch this financial hemorrhage. Even if a candidate promises tax relief, as Bob Dole did recently, the promise carries little weight. Whatever the candidate says, the voter hears: "Read my lips, Im lying."
Apart from the credibility gap, each candidate represents a huge package of policy positions covering everything from abortion to Rwandan refugees. This bundling ensures that the electoral response to a candidate sends, at best, a cryptic message about the electorates complex preferences. In the confusion, each incumbent denies responsibility for fiscal excesses.
Currently, budgetary processes suck private funds willy-nilly into a gargantuan common fund from which congressional committees ladle out billions here and billions there as the members political instincts for reelection dictate. Can anyone deny that the overall outcome is a disgraceful budgetary melange that discourages work, saving, investment, and entrepreneurship while rewarding the politically resourceful regardless of their desert or the taxpayers preferences?
Surely, if popular sovereignty has any substance at all, the people should be able to determine how much of their income the federal government takes. Government should compel citizens to pay taxes only with the frequent, clear, and unmistakable advice and consent of the compelled. Fortunately, by adopting a simple device, we could move toward satisfying this democratic requirement.
Suppose that the federal personal income tax form contained a space for the taxpayer to answer the following query: "What percentage of your income and of all others incomes shall be used to support federal government programs? The median reported percentage will be a guideline for Congress and the President."
Responses to this solicitation would provide valuable information not currently available to budgetary decision makers. It would not be binding, so no one need fear that the governments hands would be tied if a national emergency required increased taxation. However, the guideline would provide for the first time a clear, current statement of how much of their incomes the citizens really want the federal government to take.
Because taxpayers must fill out the form in any event, they are likely to respond to the query. And because individuals cannot gain by misrepresenting their true preferences, they are likely to respond honestly. Unlike current political communication, with its incentives for people to exaggerate their desire for a certain government program in the hope that others will be made to pay for it, this scheme would ask for a preference regarding the identical percentage to be taken from ones own and everyone elses income for disposition by the federal government.
Once the responses were compiled and the median announced, public officials could be put on the spot. Journalists and others could ask them to justify any plans for taxing and spending in excess of the publics expressed preference. Citizens could contemplate the desirable size of government more rationally, as public debates focused on a budgetary figure of real, fundamental significance. And perhaps, finally, politicians could be held clearly accountable for fiscal profligacy.