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ECONOMICS

Change tax tack to take power back

  • 18 November 2013

A person's usual engagement with taxes is that you pay them. You might do this through sales (goods and services) tax, your personal income tax, the capital gains tax, property taxes, or excise taxes. There are others. Most people also experience tax through that happy 'eofys' (end of fiscal year sale) moment when tax returns are usually due. You might even get some money back — more if you don't have a HECS debt. For others, usually the less lucky, there is a third way of engaging taxes. And that's through the audit.

These are the standard ways that citizens engage the public finances of Australia. Money gets paid, some of it might come back, but most of it is held in the treasuries of state and federal governments and then spent. But is this the best or only way that taxation should work?

Enter the TaxTrack idea. I'm currently working on this and first brought it up in my book Evolutionary Basic Democracy. The idea comes in two parts.

The first is that you would be able to log in to a website online and see exactly where every cent of your tax money is currently held. You would be able to see when and where it's spent and, importantly, who spent it (e.g. a ministry, public service office, or member of parliament). You might like to contact someone about this spending and you would be able to have a reliable contact method to reach someone in the right office.

The second part of the idea— and this is where things get saucy — is that you would be able to choose what your tax money will and won't be spent on.

It's not inconceivable that individual citizens be given the chance to fill out a preference form online as part of their own personal, digital tax portal. You could choose to pick 'below the line' and individually choose what your tax money can and can't be spent on. For example, you might like to only spend on funding public schools, the bullet train, hospital supplies and museums. You might choose not to spend on nuclear power plants, weapons development, or the automotive industry subsidy.

If you can't be bothered choosing individual items you can instead tick pre-packaged spending options: a socially-conscious spending option, an environmentally-friendly option, or a security-oriented one. It would be like choosing broadly where you want your superannuation to be invested.

For TaxTrack to work