Tuesday, April 15, 2008

The Best Three Bucks You Don't Have to Spend This Tax Day

There were lots of media stories today about tax day: harried, last minute filers; savings tips for next year; the best excuses to get an extension, etc. Unfortunately, though, I didn't see much about one aspect of Uncle Sam's annual payday that I think is critically important, especially this year: the voluntary check-off program that finances the Presidential Election Campaign Fund.

The presidential public financing system started in the early 1970s and is fueled by a simple, voluntary checkoff on our tax returns -- three bucks for individual filers, six bucks for couples. Sounds like a bargain to me. Actually, it enters no brainer territory when you consider that checking the “yes” box doesn't cost us a dime -- and it doesn't reduce our refund either. The checkoff actually redirects three bucks from general revenues to the Fund -- so yeah, I guess you could make the argument it "costs" us in the larger sense because our tax dollars underwrite the general fund. But the checkoff, as it's currently implemented, is financially painless -- and it's not like checking "no" gives you an extra three bucks. So it's a win-win, right?

Despite this simplicity, and lack of personal cost, participation in the checkoff program has fallen dramatically since the program's inception (27.5 percent participation on 1976 returns) -- although it has apparently leveled off at a whopping 11 percent in the last several election cycles. Wow. Color me underwhelmed -- although compared to other taxpayer checkoff or add-on programs, the Fund's checkoff has one of the higher participation rates around. Still, though, the abysmal support has meant that the Fund has faced chronic shortfalls since the early 1990s -- and the shortages are putting the whole public campaign financing system at risk.

Of course, another serious problem with the Fund has nothing to do with its structure or our apathy, and instead has to deal with the fact that leading candidates are opting not to take matching funds so they can avoid artificially low spending limits. This, of course, was one of the main points of the Fund -- to publicly support campaigns while at the same time capping them to keep a lid on runaway spending. But the Fund's contribution levels have not been indexed, and thus have not kept pace with the realities of today's campaign environment.

The Campaign Finance Institute's Task Force on Financing Presidential Nominations' issued a 2005 report, So the Voters May Choose... Reviving the Presidential Matching Fund System, offering a number of campaign finance fixes as well as recommendations to improve the Fund, especially in light of the Bipartisan Campaign Reform Act of 2002 (BCRA). Among them were:
  • Increase the income tax checkoff to five bucks, then index it thereafter.

  • Expand checkoff participation by having the FEC invest some of the checkoff funds in public education about the Fund and the checkoff program.

  • Develop better IRS standards for tax preparation software so consumers can truly make an informed choice about the checkoff.

In 2006, Sen. Russ Feingold (D-WI) and Reps. Marty Meehan (D-MA) and Christopher Shays (R-CT) introduced legislation to address several campaign finance issues, including shoring up the Presidential Election Campaign Fund. However -- surprise, surprise -- their Presidential Funding Act didn't budge in the 109th Congress. They reintroduced the bill (S. 2412/H.R. 776, though Meehan retired from Congress later in 2007), but even if it passed it would not take effect until 2009 -- and thus effect the 2012 presidential campaign. These bills would change the primary match ratio from 1:1 to 4:1, raise the spending limit for primary candidates from about $45 million to $150 million, and raise the income tax checkoff from three bucks to ten, among other items.

Public Citizen has also recommended some structural improvements to improve the Fund that merit consideration:
  • Increase the checkoff from three bucks per taxpayer to eight bucks per taxpayer.

  • Index the tax checkoff for inflation to keep the Fund solvent.

  • Return any unused public funds, repayments of public funds, interest, and fines collected for violations of the presidential public financing system into the Presidential Election Campaign Fund as a way to increase its revenues. (Currently, most of these refunds or fines are turned over to the general fund.)
So, I hope you checked the box, people. If not, well, I won't hold it against you -- this year! But I hope you seriously ponder that checkoff next year. We need the help to keep the Fund solvent, and to show the support for public campaign financing. We also need commonsense reform to make public financing attractive to candidates again -- reform that both allows candidates to be competitive but still gives the public a chance to get a handle on runaway campaign costs and diminish the influence of big money in politics.

Copyright 2008. The Zaftig Redhead. All Rights Reserved.

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