We’re a nation of savvy shoppers, and we expect that details about the products we buy will be readily available to us. Want to know where your pants were made? Look at the label. What about the calorie count for a Big Mac? In many McDonald’s, it’s right up there on the menu. And after making almost any purchase, we are handed a receipt detailing each item we bought, along with the price.
But when it comes to the largest purchase a typical consumer makes in a given year — the amount he or she spends on federal taxes — there’s no detailed record of the transaction that comes with sending that check off to the IRS.
The federal government should explain exactly where each person’s tax money goes. We need a taxpayer receipt.
A receipt would be easy to create, simple to read and — here’s a word you don’t often associate with the Internal Revenue Service — fun. The document would show how much you personally spend each year on government programs such as the FBI, NASA and foreign aid, based on their percentage of the federal budget. By breaking out your contributions, it would make abstract government programs concrete.
Here’s how it should work: After filing your taxes, you would receive an itemized receipt, by e-mail if you file electronically or by regular mail if you send in paper forms. The one-page document would cover major items such as defense, Social Security and interest on the debt. It would also include the address of a website that would offer more information on all federal spending, from salaries for members of Congress to Pell grants for higher education to the upkeep of national parks.
The cost of producing this receipt would be a relative bargain. We estimate that the IRS would have to spend about $15 million to mail the receipts to taxpayers. (Two of three households file electronically, so their e-receipts wouldn’t cost much to send.)
There would be some costs associated with maintaining the website, but that’s a small investment for a very worthy goal: clearing up confusion about the federal budget.
According to a recent University of Maryland poll, Americans on average believe that one-fourth of all federal spending goes to foreign aid. With a tax receipt, a typical middle-class family with an income of $50,000 and $6,883 in federal income taxes and payroll taxes would see that, in reality, only $42.80, or 0.6 percent, of their taxes go to foreign aid.
Polling from Third Way, a center- left think tank, has shown that three-quarters of the electorate believes that the budget deficit can be tamed without touching Social Security or Medicare. With the receipt, that same typical taxpayer would see that the nation’s two largest entitlement programs account for $2,180.48 of his or her annual tax bill. (This amount is different from the payroll taxes that person would see on a pay stub. The receipt would show the cost of those two programs as a proportion of the federal budget.)
By itself, a receipt wouldn’t suggest solutions. But it would ground the political debate in hard numbers.
(For an online calculator to show how the receipt would work, go to .)
For Democrats, the receipt would be a tool to connect the public with what they are getting out of government. Republicans would find an effective tool to spotlight government profligacy and rising debt.
Ultimately, a taxpayer receipt would be a political Rorschach test. In it, people would see what they already believe is right or wrong about government spending. But with a receipt in hand, they would have the correct facts and figures as they debate policy preferences. And that might even spur on affordable, effective government, which all good consumers should like.
A taxpayer receipt won’t reduce anyone’s tax burden. But it might reduce the burden of paying taxes.
David B. Kendall is a fellow at Third Way, a center-left think tank. Ethan Porter is a contributing editor at Democracy: A Journal of Ideas.
