A Really Big GoFundMe

By Robert Bernstein   |   March 18, 2021

Network news shows tend to end with a feel-good story about people helping people. This often involves someone who got cancer, or some other dreaded disease, and neighbors and friends who mount a fundraiser for them. Sometimes, it even involves children setting up a lemonade stand for the cause.

GoFundMe has raised $9 billion since its inception in 2010. One third of their campaigns are for medical costs. That’s not surprising. Did you know that two-thirds of all bankruptcies in the U.S. are due to medical issues?

What if we had a really big GoFundMe? Instead of relying on people who are feeling charitable or guilty, how about we expand it so that everyone gives something? What if we made it more fair by having people who have more money give more? And what if a board of citizens and experts researched the most effective way to spend that money rather than targeting it based on who has the most friends or the best story?

“Taxes are what we pay for civilized society.” Variations of this quote go back to Justice Oliver Wendell Holmes, Jr., in 1927 and decades earlier. What else can we say about taxes in this season of tax preparation?

Every other industrialized country (and many poor countries) has some form of universal healthcare. The U.S. is an outlier. Some will protest that those other countries pay more in taxes. But the U.S. has many hidden taxes and fees. Mitt Romney claimed that 47% of Americans pay no taxes. Wrong. All Americans pay sales taxes. Even renters pay property taxes through their rent.

Perhaps it is more useful to look at income inequality. Countries such as the United Kingdom, France, Spain and Italy have worse income inequality than the U.S. But if you include taxes and transfers of money to those in need, the U.S. becomes the fourth worst nation in inequality among members of the Organization for Economic and Co-operation and Development. In fact, only Chile, Mexico and Turkey are worse.

Are there better systems of taxation? Our system of progressive taxation asks more money from those who earn more. But should we be taxing those who are the most productive? Why not tax those things we want less of? This is the idea behind “sin taxes” on alcohol and tobacco.

Economist Henry George proposed a single tax on land in the 1800s. Land is one thing of which you can’t make more. And it’s in the public interest to make the best use of it. Such a tax would reduce wasteful sprawl, incentivize productive work, and reduce wealth inequality.

In our modern world, we should expand this to include a tax on raw materials that have a finite supply. This would incentivize the most efficient use of mined materials and incentivize their recycling, including fossil fuels.

At the other end, we should also tax all forms of pollution. Surely, we want less pollution. Pollution is a case of dumping trash into a public area. Notably, humans have mined a hundred million years’ worth of carbon from fossil fuels and, in about a hundred years, have dumped it into the atmosphere.

Bill Gates has launched a climate initiative that includes removal of carbon dioxide from the atmosphere. This “trash cleanup” currently costs $400 a ton. If that is what it costs to clean up this trash, isn’t that what we should charge people who put carbon dioxide in the atmosphere? Burning a gallon of gasoline places about 20 pounds of carbon dioxide into our atmosphere. At the cost of $400 per 2,000 pounds, that’s $4 a gallon we should charge for waste disposal.

But that’s not the biggest public cost of private vehicle use. Land that’s been paved for roads and parking has a bigger environmental and social impact, even if the vehicles run on renewable energy. Most roads are paid for with property and sales taxes since fuel taxes pay only a fraction of road costs. And almost none of this money goes toward the land. It’s used just for the paving, which is currently in terrible condition.

Did you know that bicyclists pay six times more than motorists do per-mile traveled on roads? That’s because they pay those other taxes but travel fewer miles.

Imagine how different our land and transportation usage would be if we charged the true cost of roads and parking to motorists? We are not talking about punitive fines. We are just talking about paying the actual cost. When we talk about taxes and public spending, aren’t we really talking about fairness and quality-of-life issues?

 

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