Taxpayer’s Contribution to Federal Revenue

Sources of Federal  Tax Revenue, Fiscal Year 2010


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Imagine individual income taxpaying citizens being governed by the principle “for the people,” and allowed to democratically designate 40 percent of their federal income taxes to areas of governance they choose to support?

Allowing taxpayers to choose and designate part of their federal income taxes dollars would not necessarily be detrimental to any government operations.

The individual federal income tax composes 42 percent of the total federal tax revenue (Figure 1). Given individual taxpayers are allowed to designate 40 percent of their tax dollars to government agencies of their choice, the overall impact would be citizens directing around 17 percent of the total federal budget, which accounts for as much as 43 percent of discretionary spending (Figure 2), which is less than what the government domestically spends (Figure 3). Some taxpayers may opt to designate funds as payment towards reducing the federal deficit or contribute to mandatory spending entitlement programs (Figure 4 – Welfare, Medicare, & Social Security); thereby shifting contributions into mandatory spending categories rather than discretionary spending.

Even within a budget structure providing for individual taxpayer distributions, the national defense budget would not necessarily be touched (Figure 3 – defense consumes 51% of discretionary spending) and remain intact.

In the long run, citizens who help direct governance with a percentage of their tax dollars might become motivated to be more informed of government operations.

Taxpayer Share of Federal Government



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