Our group from the Regiomontanus Gymnasium in Hassfurt, has worked on the issue “Donations and Social Policies – Are Voluntary Donations the Better Means to Finance Public Services and Expenses?“ Currently, the German tax system requires every citizen to pay income tax to finance the state’s expenses, programs and projects. Taxpayers’ money is the most important source of income for the German state and is available to public institutions on a federal, state and municipal level. Depending on their income and tax category, citizens pay a tax rate between 14% and 42%.
The German state spends this earned tax revenue, for instance, on public education and the health sector, as well as on the salaries and pensions of civil servants.
There are, however, some problems with this tax system. One of them is that taxpayers have no say in how the government spends their income tax. This makes them feel being treated unfairly, especially if they do not see the tax revenue being spent on something in their community from which they might benefit. This has also been confirmed by our survey (from the 5th of June; 101 people participated).
But also, the complexity of the German tax system, which people have to deal with when they file their tax return, causes anger and frustration.
These two problems could be resolved with our idea. Our plan is to give taxpayers, to some extent, the opportunity to decide online on how their income tax is supposed to be spent by the government. The majority of a person’s income tax can be allocated to projects that seem worthwhile to this citizen, and a mandatory fixed percentage of the taxpayer’s money will be garnered by the state to pay for rather unpopular but necessary and meaningful projects.
Citizens can, however, only have limited control over the distribution of funds, which is why certain directives are necessary for our approach.
The tax distribution must be re-assigned by each taxpayer annually. If this is not done, it will be allocated automatically. We also want to ensure that the municipal governments can adjust the tax rate individually.
This will result in a higher willingness to pay taxes and a lower the risk of tax evasion. The fact that less money is invested in sectors that are considered a waste of taxpayers’ money, while a higher budget is allotted to projects that citizens consider important, increases the right to participation. In addition, it guarantees greater transparency and creates a stronger sense of community and solidarity.