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Often people are critical of what they consider to be excessive taxation. Are there any measures to actually check if they are excessive? What are indicators to check as to whether government is wisely spending the money?

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    Trump's opinion of wise spending comes nowhere near Biden's... which does one use, and which is truly better, more wise?
    – CGCampbell
    Jul 28 at 12:36
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    Are you asking whether the public can judge if the government was free of corruption and spent money as efficiently as possible to achieve its stated goals? Or are you asking if the public can determine if the goals that were targeted for spending are helpful to the country? Jul 28 at 16:17
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    This really is going to be opinion based as someone on one side of the political spectrum is going to have a different opinion about it being spent effectively then someone on the opposite side.
    – Joe W
    Jul 28 at 16:40
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    Often people criticize government by saying that when government increases taxes they're looting the people — citation needed; apart from extremist libertarians representing less than 0.1% of the population, I've never seen this argument being made. Can you please rephrase this hyperbolic statement in an otherwise interesting and relevant question?
    – gerrit
    Jul 29 at 7:21
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    Common sentiment in India, search up reactions to petrol prices tax hike @gerrit Jul 29 at 8:25

4 Answers 4

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One cannot, because using money effectively or using money wisely are normative statements, which reflects one's subjective judgement about what is good for the country and its people. Thus, one can check (via the official government sources), whether the government did spend the required amount of tax money on education, healthcare or supporting war in Ukraine, but it is highly unlikely that all the taxpayers would agree that this spending was wise or effective.

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    @ccprog I think that effectiveness of a policy/spending is hard to define and measure. One can come up with some metrics, but this is just kicking the can down the road, because then it is a mater of belief that a particular metric really reflects effectiveness. E.g., the US has spent $8 billion on security assistance to Ukraine since February - was it effective? Perhaps, it prevented the collapse of the Ukrainian army... or perhaps it didn't make any difference and the things would be where they are now anyway. Jul 28 at 14:28
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    There is a whole branch of macroeconomics that kicks that particular can.
    – ccprog
    Jul 28 at 14:37
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    @alamar - I'm pretty sure most audits don't check to see if the money was spent effectively, just that it was spent as intended.
    – Bobson
    Jul 28 at 19:24
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    I feel like the OP is asking basically about "fraud, waste and abuse", which an audit could uncover. i.e., less about whether buying all the school rooms new desks was an effective expenditure, and more about whether that money went to the Prime Minster's cousin, who supplied the desks at a rate of $15,000 per desk.
    – JamieB
    Jul 28 at 22:08
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    @alamar here is a quote about effectiveness of commercial enterprises: "Half the money I spend on advertising is wasted; the trouble is I don't know which half”. Jul 29 at 5:18
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Most countries have an institution that performs audits on the way government spends money, called for example Court of Audit, Board of Audit or Auditor-General. Normally, these institutions only have advisory powers and cannot directly intervene in the spending activities.

Whether this institution has enough independence to effectively control government spending obviously differs from country to country. Also, whether this institution constitutes a separate branch of government, or is part of executive, legislative, or judiciary is a longstanding question answered differently everywhere.

But what you can hope for is that there will be regular public reports about the audit results. They can be the starting point for discussions about public spending. For example, in my country (Germany), the annual report of the Bundesrechnungshof sparks a discussion in the media each year, where government officials that were criticised in the report have to defend their spending behavior in detail.

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  • It should be added that these spending auditions probably only look for obvious spending mistakes. Besides there is still corruption and maybe general misallocations and not very efficient spending or too much bureaucracy maybe. There are more types of inefficient spending. Even privatizations could be seen as inefficient spending (because they may become expensive in the long run).
    – Trilarion
    Jul 30 at 9:45
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    Don't underestimate the breadth of what these institutions take into focus. For example this list of special reports contains a number of issues related to targeting funding to achieve stated goals, prevention of shadow budgets, inappropriate legislation and others.
    – ccprog
    Jul 30 at 14:52
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In Australia we are given a tax receipt from the federal government that shows what our taxes were spent on. Breaking down where each of my personal tax dollars was spent. I guess what it is spent on is different to how effectively that money is being spent, but at least it allows you to see if where the money is being directed to by the current government aligns to your expectations and can impact who you may vote for.

Join others and demand your government does similar

enter image description here

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    Spending 0.7% of the budget on immigration doesn't sounds so bad until you learn they spent $40m to resettle a single person. In effect, people accused of no crime are warehoused in appalling conditions in arbitrary and indefinite detention. Dozens of countries, the United Nations, and rights groups including Amnesty International and Human Rights Watch, have documented and condemned the illegal detention. theguardian.com/world/2016/aug/10/… To understand those numbers, one needs to do a bit of research.
    – Gantendo
    Jul 29 at 0:46
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    I think the numbers by themselves are rather meaningless. When determining if something is an effective use of money one should not just look at the amount of money spent, but also at the results. Resettling a single human should not cost $40m. I think everyone can agree on that regardless of political affiliation.
    – Gantendo
    Jul 29 at 0:50
  • The UK government does something similar.
    – gerrit
    Jul 29 at 10:15
  • And this is probably the issue - commentators are commentating on 0.7% of budget and saying $40M is a lot - how much of the immigration budget is that? But ignoring the order of magnitude budgets for Welfare and Defence etc.
    – mmmmmm
    Jul 29 at 21:14
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    The Australian "tax receipt" is literally just a simple breakdown of the disposal of total government revenue. Everyone gets the same bar chart, the numbers are just scaled by your personal tax amount, in a fairly trivial calculation. They were introduced as a rhetorical device by a government keen on cutting welfare and services to reduce debt, hoping that people would be more outraged by seeing it as "personally" spending $7,000 than by seeing it as collectively spending 200 billion dollars. "Demand your government does similar" feels like a waste of time, to me.
    – Ben
    Jul 29 at 23:44
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One begins by trying to come up with definitions of "effectively" and "improving" (to elaborate on Roger Vadim's excellent answer).

Often "effectively" seems to translate to "spent by our political party".

Take for example law enforcement. Possible spending / actions include:

  • Attempts to make people who would otherwise become criminals into productive citizens:
    • Job training
    • Improving education
    • Attempts to reduce poverty,
  • Performing studies to determine what measures have been or are predicted to be effective in reducing future crime
  • Attempts to improve prisons to help reform inmates / lower recidivism
  • Hiring more police officers
  • Decriminalization of some non-violent offenses (fewer inmates, people remain more employable vs. becoming felons)
  • Converting parts of police services to e.g. conflict resolution experts
  • Passing legislation to 'get tough on crime'
  • Passing legislation to attempt to improve the small business climate
  • Passing pro-corporate legislation to make more jobs

Every intervention will have its effects, unintended side-effects, proponents and critics.

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