Thoughts on Freedom

A possible reform to keep down government spending is a constitutional amendment freezing all yearly spending at a certain amount. If the amount was an inflation adjusted $X per year, this would force the government to prioritise spending within a certain bound. The advantage of a constitutional spending limitation is that it places a cap on the expansion of government.

It might be achievable in those states where the constitution can be amended by simple legislative majority. At the federal level however, it would be more difficult to achieve.

For sure, arguing for a constitutional amendment is hopelessly idealistic. If every budget included no new spending, how would politicians ‘bring home the bacon’ to bribe their constituents? Politicians would be forced to shuffle the same amount between different public services each year.

On the other hand, pushing for this reform could lead to some interesting debate about what an appropriate capped amount is. Is it $100 billion? $200 billion? Maybe $300 billion? How much does a government really need to spend in order to perform its core functions?

Former New Hampshire Governor, Craig Benson, announced in March 2003 that he was setting up a special ‘Tax Me More’ account for those who feel they aren’t paying enough tax. The accounts provide an opportunity for advocates of big government to put their money where their mouth is, by donating to the government.

According to Americans for Tax Reform, five other states – Arkansas, Massachusetts, Montana, Oklahoma and Virginia – have introduced a similar voluntary tax. About a dozen American states have publicly debated the concept.

‘Tax Me More’ accounts would be a useful tool for fiscally conservative Australian politicians (there aren’t many of them) looking for a way to justify tax cuts. The importance of politicians being able to identify, through reference to the accounts in public debate, that increased spending usually equals a corresponding increase in the tax burden, should not be underestimated.

Environmentalists, most of whom prefer the government keep more of our money, could donate publicly so everyone can see the extent of their financial commitment to causes like combating climate change. Any environmental taxes could be voluntary.

Few people are as generous with their own money as they are with someone else’s money. If, as is likely, the accounts receive negligible contributions, we will know with a greater degree of certainty the disconnect between support of a greater role for government, and the actual willingness to sacrifice hard earned cash. This could provide evidence in support of the contention that the supply of government exceeds the demand.