Tax Guru – Ker$tetter Letter

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    April 2007
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Earmarking our tax dollars?

Posted by taxguru on April 6, 2007

From A Reader:

Subject: open letter to the irs
I thought you’d appreciate this page that my friend just posted–his ideas about income tax earmarking.



My Reply:

Thanks for sharing that. 

I’ve written about that kind of fantasy – allowing us to designate how our tax dollars are spent –  a number of times over the past decades.  Several years ago, I even ran a poll of readers asking how they would allocate their tax dollars on a percentage basis for the various governmental agencies.

Unfortunately, I have also had to explain on several occasions that such direct control over how our tax money is spent is impossible under our system  of government.  Under the US Constitution, we have set up a representative republic where the smartest and brightest people among us are elected and sent to Washington DC, where they are authorized to take as much of our money from us as they want and then spend it as they, in their superior wisdom, deem it best. 

Most elected officials will allow certain people to assist them in those spending decisions in exchange for campaign contributions (aka bribes); but as far as what the average taxpayer wants his/her money to be spent on, they couldn’t care less.

IRS has no power over how any of our tax dollars are spent.  They are our rulers’ enforcers and are strictly tasked with using brute force to ensure a steady stream of money flowing in to DC.

While I am foremost in favor of repealing the 16th Amendment and abolishing all income taxes, my second best option would be to have a new amendment that adds a schedule to our tax returns that allows each of us taxpayers to earmark exactly where each of our tax dollars is spent.

That will never happen; but we can still dream.

Thanks again for writing.

Kerry Kerstetter



Hi Kerry,

Sadly, I agree with you that congress will never give up control of spending but if you read the proposal carefully, it’s not actually advocating for removing control from the politicians.  Really, all it is recommending is a cosmetic website that will tally “allocations” towards budgetary line items.  The truth is, all budgeting would continue to be in the politicians’ hands (for better or for worse), and all taxes paid would still go into the general fund.  The only real true value of this is increasing taxpayer buy-in and engagement.

It’s the feel-good equivalent of buying a brick on the entry plaza for your favorite ballpark–the truth is, they’re going to spend how they want, and your money doesn’t actually go where you tell it to.  But, the upside is you get a nice memento and a feeling of ownership.

Thanks for your feedback!



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