Stephen Moore in today’s Wall Street Journal explores why wealthy proponents of taxing the wealthy don’t pay more in taxes when they can voluntarily pay higher taxes. The federal fund for “gift contributions to reduce debt held by the public” received just $300 million last year, less than two hours’ worth of federal borrowing. In Massachusetts, only 1,000 people a year have volunteered to pay the old, higher income tax rate, giving a total of $69,000 to that state’s government. Moore concludes it is due to a fundamental misunderstanding of collective action.
Just because something is a collective good doesn’t mean it has to be paid for out of coercive taxes. … Throughout history Americans have made heroic acts of patriotism, not because they were required to by law but for love of country. Hundreds of thousands of Americans have volunteered to serve in the military and many have given their lives on the battlefield. They didn’t say: “I will only die for my country if the fellow next door is required to.” During the Revolutionary War many Americans gave their fortunes to help finance the cause of Independence. But Warren Buffett won’t voluntarily contribute to pay down the national debt?
The trend is no better in North Carolina, where people can donate to specific functions of local government as well as general donations to government itself. The concept of voluntary giving to governments is so alien, a former official in one North Carolina town even compared the a donation to the town’s fire department to earmarking money for a nonprofit’s purchase of toilet paper. But it is precisely programs such as EMS, K9 units, specific schools, and children’s health clinics that receive the bulk of voluntary payments to local government, as we found in a study of Wake County giving. North Carolina does not have a fund to receive gifts, donations, or voluntary contributions. It should. We suggest a tax-me-more fund in our alternative budget to give the tax hikers the chance to be the change.
But don’t hold your breath, because when liberals say they want higher taxes, they mean on you.”