One aspect of the large division in America is around which major institution one trusts their welfare, taxes, with: the private corporation or the public government. Republicans tend to trust the private corporation, while democrats tend to trust the federal government. Both are goliath, complex, bureaucratic, imperfect, and impersonal institutions. While both were once responsive, humble, respectful, effective and efficient, honest in their infancy, after growing and maturing to a certain extent, both become complacent, dysfunctional, inept, and corrupt.
However, there is one major difference between them. Corporations remain fairly responsive to shareholders and consumers. When corporations make bad decisions, policies, products or services, they suffer quick consequences as consumers stop purchasing their products and services, and shareholders sell their stock.
Whereas the federal government has no real incentive to be responsive to citizens other than fear by its leaders that they will be voted out of office when their terms expire. Taxes, being mandatory investments, roll into the government coffers whether they are spent wisely or foolishly, with taxpayers having little say in how their taxes are being spent. But while in office, leaders feel more accountable to their party, specific constituents.
The problem can be defined as “how can the federal government become more responsive to its citizens?” A bold idea that I submit for consideration is to reconceive taxes as voluntary stock investments into the federal government and nation. When leaders spend the invested tax money foolishly, citizens are free to divest by selling their shares, and will do so. Leaders then respond by changing their spending policies to regain invested dollars. Thus, citizen taxpayers get the nation they invested in.
Some people will say this will never work, because we cannot risk having the federal government default for lack of investment money. To them, I say, leaders will never allow the government to default. They will now have an effective incentive to keep the federal government coffers filled. As soon as they see the investment dollars declining in their coffers, they will take the necessary actions to prevent a default, and will make the changes necessary, not just to prevent a default, but to make the government and nation prosperous, with full coffers.
But, this proposal will not likely end our great national division. Some citizens will tend to invest in social programs to help the poor, needy, and minorities, while others will tend to invest in programs that help the private sector, and build a strong defense. I believe these conflicting investments will tend to build sufficiently strong federal government programs that suit both groups. Programs that appeal to all citizens, such as transportation infrastructure, education, and social security, will likely prosper with a lot of investment dollars, while controversial or special interest programs such as a space mission to Mars or building a museum for Lawrence Welk will likely receive only a small amount of investment dollars, as there is little perceived return on their investment.
To make this method of taxation work, we would likely need to set mandatory taxes to cover the cost of essential government functions. The political challenge would likely be in agreeing what functions of government are truly essential, though a set of objective criteria should be possible.
What are your thoughts on this idea?