Lessig's proposals

Lawrence Lessig proposes having the government take the first $50 of a person’s income tax payment, and return it to each individual taxpayer as a voucher to be used to fund political campaigns. The taxpayer would be able to spend this voucher on any candidate he wants, or to spend it on general campaign expenses of the party he identifies with. Each individual would be able to contribute no more than $100 more to any campaign. Your estimate is that this process could potentially generate as much as 6 billion dollars to be distributed to candidates.

This proposal is ingenious, and may even have the effect he and I want, but I have some reservations about it. The first has to do with the issue brought up by the Citizen’s United decision. Is a corporation an individual, a person? If so, as the Citizen’s United decision seems to imply, would the first $50 of a corporation’s tax payment also be returned to the corporation to be used for campaign contributions? Would a corporation also be limited to $100 in additional contributions? This would be an interesting development. If not, how would corporations be treated? Is a constitutional amendment necessary to make sure that a corporation is not a person? There is a separate movement to this effect (see Jeffrey Clements, Corporations are not People).

The second reservation has to do with paying for it. It would involve reducing revenue to the government of potentially 6 billion dollars. That reduction would have to be compensated for by either reducing spending in other areas, or raising taxes to make up for the reduction. Republicans, as they are now, would be attracted to reducing spending, but the Democrats would resist and would want to raise taxes. The measure would thus become just another point of contention between the Republicans and Democrats in their paralyzing war between taxing and spending. The likelihood of getting anything so game changing through the present congress seems vanishingly small. Corporations and the wealthy would fight it strongly. This is not to say that it might not be a good idea, just that it would take a strong external push to get it past the logjam that our government is.

The third reservation is perhaps more philosophical. It has to do with appealing to the government to fix the problems we have with the government. Governments, of course, set the rules for just about everything, including financing campaigns, but to ask them to in addition create an agency to administer a program to provide that financing is a step beyond what seems to be appropriate for a government. Such an agency could lead to a moral hazard problem such as what we have in dealing with large banks, or with the corporate capture of regulatory agencies. Politically also, it is more difficult to create such an agency than it is to merely change the rules for financing campaigns.