Imagine a country where up to 50% of the tax dollars are allocated by the people instead of congress/government. Once a year, the citizens file a vote with their tax return, which allocates percentages to the programs which they feel are most important. Each citizen controls an equal portion of the taxes (an equal fraction with no difference based on income).
The requirements for establishing a program are as follows:
- 0.5% of the citizen population must provide their verifiable signature to support a proposed program.
- Programs must comply with all laws. They can't do anything illegal.
- Programs cannot support the election of a candidate for any office.
- Programs must publish an itemized budget each year of where funding went.
- Programs are limited to spending 5% of their budget on advertising or external communication.
- If benefits are limited to a group (for example low income individuals) this must be stated up-front. No part of the criteria to receive benefits can be based on the perceived support for any program.
- There is a 6 month period from public announcement of the program where a veto is allowed to be established. If the veto is able to get twice as many signatures as the proposed program, then the proposed program will be cancelled.
Assume the following systems are established and working properly under this model:
- The country has a democratically elected leader and functional court/law system.
- Each citizen has full free speech and there is a functional news media. This news media is actively engaged in reporting underfunded issues, programs that are improperly using funds, and expected allocation of funds based on pre-polling.
- Each citizen's vote is verified properly to come from them.
- Each citizen is able to vote securely and privately. Votes remain private.
- All votes are counted properly. The system for counting the votes is properly verified at all stages.
- Programs do not receive any information about who voted for them. There is no way for them to verify this information.
All citizens get control over an equal portion of taxes. In a nation with $2 billion in tax revenue and 1 million citizens, they'd each get to allocate $1000. They are allowed to split the vote between any number of programs with up to 0.1% precision.
As an example, someone might choose to put 50% on a program to cure cancer, 20% on a program that repairs a highway they use regularly, 7.5% on a space exploration program, and the remaining 22.5% on a project to end homelessness by providing affordable housing for people. In that case, 500 dollars of the tax revenue would go to the cancer program, 200 dollars to the highway repair program, 75 dollars to space exploration, and 225 dollars to the homelessness project.
Each year the projects would receive their budget based on the votes and the total taxes collected. Votes would be collected securely and projects would not be told who had voted for them.
Given the above system and assuming that the above systems established function correctly (as listed above), what are the biggest problems that would or could occur with this system? By biggest problems, I mean the worst possible mis-allocation of funds that could reasonable occur, which results in the most undesirable outcome for the citizens of this country.