Deliberative Democracy and Tax System Improvements

In June 2011, What's Next California and a few others sponsored a Deliberative Polling with over 400 Californians participating (see my 6/26/11 post and information and links from Stanford's Center for Deliberative Democracy and this brief summary). One of the topics for which participants were polled before the discussion and after was tax and budget issues. What's Next California has a video (from PBS Newshour) on the tax issues discussed and changes in polling. For example, support for some type of a split roll for differences between how residential and non-residential property is taxed changed from 52% in support before the group discussion and 72% afterwards. Support for subjecting services to sales tax and lowering the sales tax rate changed from 38% before to 45% afterwards.

And, this was a weekend for discussions that included more than tax issues. I was there that weekend. I think great process on helping people understand complicated tax issues was a great start, but was just a start.

I think for both federal and state tax reform, a significant obstacle is that most people do not have a good understanding of how the system works. For example, many individuals believe the income tax has to have a mortgage interest deduction. But do they know how generous the current deduction is (up to $1.1 million of debt, a mortgage on a vacation home and home equity debt that can be used for personal purposes although interest on your credit cards is not deductible), they do not see how it is worth more to individuals in higher tax brackets and whether they would be better off with lower rates and/or a higher standard deduction. It takes a lot of information to get at understanding just this one issue.

I encourage you to take a look at the tax video or the entire PBS video (1 hour) - here.

Some ideas:

1. More information provided with tax forms to explain policy supporting various parts of the system. For example, when you pull up Form 1040 online, there are links for each item to provide background on the rule, its "cost" and how it is used among the income quintiles.
2. Having elected officials explain the rationale, with data, for all proposed tax changes, who benefits, the cost, and alternatives.
3. An informative taxpayer receipt (see 4/17/11 post). (I'm still working on this topic - more later.)
4. Simplifying existing rules.

btw - there is a presentation on the June deliberative polling event on January 3 in San Francisco - here.

btw - if you watch the full video, around the 32 minute mark, a young participant says that if it isn't easier to understand and isn't fun, youth won't want to be engaged or interested in voting. I hope that is not true! But, I'm willing to add that to the list above - let's make it fun! Any ideas?

What do you think?