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Chapter 12
As a nation how much should we tax ourselves to finance the federal government?

“We the people” should have control of the size of the government under which we live. The size of the federal government depends on how much money we provide to it by taxing ourselves. If the demos became the sole agent of taxation in the federal government, and the federal government were required by constitutional law to restrain its spending to what the demos specified, then we would gain control over the size of government.

(Actually, as it currently functions, the federal government is quite incapable of controlling its spending or size. There are a few ways in which it functions that would have to be altered in order to make it capable of managing its size and staying within the spending limits dictated by the demos. These will be discussed later.)

As part of the partial redesign of our government presented in this book, the sole power to tax at the federal level would be moved from the other branches of the government into the demos and into the hands of the entire electorate. Our current federal system of taxation is incredibly complex, way too complex for the demos to handle. To make it possible for the electorate to directly set the size and distribution of the federal tax burden, the tax system would have to be greatly simplified. Therefore, the entire federal tax labyrinth would be eliminated and replaced by only three sources of tax revenue: a tax on corporate and business annual gross revenue, a personal income tax, and a personal inheritance tax. This done, the demos would then be in a position to control the size and distribution of the federal tax burden.

Our first demos issue would be to determine the size of the tax burden. As a nation how much should we tax ourselves to finance the federal government? In following issues the electorate will determine the distribution of the tax burden that we have set upon ourselves.

This first issue’s demos page could display the dollar amount of money that we taxpayers provided to the federal government during its most recently completed fiscal year. But for most of us this amount would only be a curiosity. It would be a meaningless, mind-boggling figure. It would also not be very useful.

A percentage figure is much more comprehendible and serviceable. On this demos issue’s page the amount we taxed ourselves to finance the federal government would be expressed as a percentage of all private sector income and revenue earned in the nation. Let us say that this current percentage figure is 22%. As we shall see in later chapters, this does not mean that every taxpayer would be taxed at this 22% rate, but that all of the taxes of private individuals, businesses, and corporations paying taxes at varying tax rates taken as a whole would average out to be 22%. This issue’s page could also contain small line charts showing these dollar and percentage figures for preceding years so that voters would readily know if the federal tax burden has been growing or shrinking in size.

With these figures in mind along with many other personal thoughts and experiences, the voter would have some idea as to whether a larger or smaller federal government seemed desirable. In addition, in a manner described earlier, charts and graphs, pro and con arguments, and every manner of debate and discussion would be available in the issue’s hierarchy of pages to the extent that the voter cared to delve into them. Also, the voter will have become much acquainted with the issue while in high school and likely will have been bombarded over time by every manner of argument outside the demos, including the president, representatives, and senators using their offices as bully pulpits.

Using the 22% figure as an example, the demos question itself might be formulated: By the taxes that we set upon ourselves, we currently pay on average 22% of all private sector income and revenue to support the federal government. Do you want this 22% tax rate to be increased, kept at the current amount, or decreased? Each of the issue’s three options—“Increase,” “Keep at the current amount,” and “Decrease”—would be displayed within a selectable button on the issue’s demos page. “Increase” would be displayed within a green upward-pointing arrow button. Below it “Keep at the current amount” would be displayed within a yellow rectangular or square button. And below that “Decrease” would be displayed within a red downward-pointing arrow button. The button containing the voter’s current selection would be highlighted. This same three-button arrangement would be used for some other issues’ demos pages as well. (Appendix 1 contains a detailed discussion of all of the demos voting methods.)

Since the federal government operates on an annual budget, this demos issue would have a trigger date. The demos members would haggle and change votes on the issue continuously over time, year in and year out. But it would be the demos consensus as of, say (just for the sake of this discussion), midnight on the last day of each year that would determine what percentage amount of our income and revenue is provided to the federal government for its next fiscal year.

In controlling the size of the federal government’s annual budget, over time the demos would control the size of the federal government itself. If demoses with the sole power to tax were created at all levels of government, then the demos electorates would have control over the size of government at all levels. Ultimately, this would give the demos electorates control over the size of the public sector of our economy in relation to the private sector.

Always voting in his or her own self-interest, each member of the demos would vote in favor of more or less government. Those best served by more government should vote in favor of more taxes; those best served by less government should vote for lower taxes. In general, that sector of the economy, public or private, would increase that best serves the populace. Business and government could compete for and win the hearts of the electorate by doing the better job of including and caring for employees and consumers and by becoming more honest, efficient, and helpful.

Note should be made here about the size of the federal government. Many people feel that the government is already too large. Would adding yet another branch, a demos, make it even larger? No. In fact, the size of government as a whole would shrink considerably.

First, most taxpayers would want to keep taxes low and the size of the federal government lean. Second, the current plutocracy creates a host of social ills to which it then applies a host of ineffectual Band-Aids multiplying the size of government (not to mention the amount of misery, paperwork, and effort demanded of businesses and individuals in the private sector). Also, much of the size of government has to do with the deliberate creation of complexity for the purpose of obfuscation, that is, to make things cloudy and unclear so that the wealthy may have a labyrinth within which to evade taxation and social responsibility and to engage in secretive deals and manipulations. In moving taxation into the hands of all of us within the demos and greatly simplifying the system, the increase in the size of government caused by the addition of the demos would be offset by a dramatic decrease in the size of the legislative and executive branches of government. Most or at least much of the physical infrastructure that would be required for a nationwide demos system is already developed.

A reliable and secure nationwide demos system could cost several billion dollars to construct, even tens of billions. This may at first glance seem like a lot of money. But it pales in comparison to the hundreds of billions of dollars we spend and waste annually attempting to repair the immense amount of social damage and misery resulting from our current plutocracy. The cost of a demos—whatever its cost!—would be one of the best bargains Americans ever purchased with their taxes.

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