What If The IRS Showed How Your Taxes Are Spent?

Imagine that when you filed your taxes you got a receipt from the IRS that showed how your money was spent. David Kendall, a senior fellow at the think tank Third Way, argues that this would clear up misconceptions about where our taxpayer dollars go and help restore trust between citizens and the government. Robert Siegel talks with Kendall about his idea.

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Imagine seeing someone who has just filed his federal income taxes and on his lapel is a sticker like the one you get on Election Day that says: I voted. Except this one says: I paid my taxes. Well, in the current anti-tax mood of the country, it would be like wearing a sticker that says: I just got mugged.

We don't associate civic pride or patriotism with the act of anteing-up for the common good every April. And that strikes David Kendall as unfortunate. Kendall is senior fellow for Health and Fiscal Policy at Third Way, a centrist public policy think tank. And he proposes something in the Spring 2011 issue of the journal Democracy that is aimed at reducing the detestation of taxpaying. He proposes a receipt.

David Kendall, why a receipt?

Mr. DAVID KENDALL (Senior Fellow, Third Way): Well, Americans are great consumers of information. We like to see, you know, where our clothes come from, how many calories there are in our candy bars. But when it comes to taxes, people just don't know where their tax dollars go.

Who knows how much of our tax dollar went to develop clean energy or reduce our dependence on foreign oil? You know, that's just one of the reasons we feel disconnected from our government, and we think a tax receipt would help give people an idea where their tax dollars go.

SIEGEL: And so, as in the journal article, where you made a mockup of Jane Q. Taxpayer's 2010 combined federal tax and FICA payment of $6,883 on $50,000 of household income, Jane Q. Taxpayer would see a breakdown of where that $6,883 went.

Mr. KENDALL: Exactly, and so for instance, $15 of that tax bill went to the FBI. Now, if you listen to the debate in Washington over taxes and our spending, you get a sense that all of it is wasteful. But, you know, $15 for the FBI, that's actually a great bargain.

SIEGEL: Now, I should say that Third Way has a website where one can plug in one's income and see an online version of this. And as of today, the White House has the same thing or a very similar thing.

Mr. KENDALL: Yes, we're delighted that the White House has put up its version of a taxpayer receipt. There is also the next step, though, which is to actually give that to people when they file their taxes.

Maybe what you do is sort of cross off what you don't like about where the government is spending its money and send it in to your congressman.

SIEGEL: How much would it cost to produce a receipt for every taxpayer?

Mr. KENDALL: Well, we estimate, you know, about $15 million is what it would cost to actually mail it to the people who are continuing to file their taxes by mail. I think everyone else would be fine if they could get an electronic version, if they file electronically. So the cost is really minimal.

SIEGEL: You could have some problems here, though, with language. That is, it's one thing to be straightforward and say this much goes for Medicare, but you might, you know, find yourself one day with someone saying: No, put in job-killing before that or octopus-like department of whatever from Washington encroaching on your life there instead.

Mr. KENDALL: Right. That's why it really has to be a bipartisan effort. You could say welfare, or you could say low-income assistance. There's differences in language. And that's why Senator Scott Brown and Bill Nelson have worked out a bipartisan way of approaching this.

SIEGEL: We should say Brown, Republican of Massachusetts, and Nelson, Democrat of Florida.

Mr. KENDALL: The same bill has been introduced in the House by Mike Quigley and Aaron Schock, both - or a Republican and Democrat, both from Illinois.

SIEGEL: I mean, do you have any indication that we could see the written receipt next year around tax time?

Mr. KENDALL: Well, it's entirely doable. We have an administration that's for it. The IRS has already started to look at this issue. I think there's a good chance.

SIEGEL: That's David Kendall, speaking to us from Missoula, Montana. He is co-author, with Ethan Porter, of the article "Seeing Where the Money Went" in the Spring 2011 issue of Democracy: A Journal of Ideas. Mr. Kendall, thank you very much.

Mr. KENDALL: Thank you.

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