How to Raise Revenue Without Raising Taxes

All levels of government can raise revenue without raising taxes.

Raising taxes is rarely a good idea. It takes needed money out of the productive economy, depresses economic growth and sends citizens looking for tax shelters. It reduces consumer confidence and makes the government increasingly unpopular with the middle-classes. However, cities, states and the federal government are in desperate need of revenue, but and in most cases, are reluctant to raise taxes. There are several ways of raising revenue that do not require tax increases.

Instructions

Fiscal soundness

1. Lower taxes. During the three times taxes have been drastically lowered, in the 1920s, 1960s and 1980s, public revenue skyrocketed. After the tax cuts of the 1920s, federal revenue went up by 61 percent from 1921 to 1928. When President John F. Kennedy cut taxes, revenue increased 62 percent from 1961 to 1968. Finally, the Reagan administration tax cuts of the 1980s saw a huge increase in revenue. Tax revenues increased almost 100 percent from 1981 to 1988. The cause of this is simple. Lowering taxes reduces the desire to cheat on taxes or find tax shelters. It increases economic activity and provides incentives for taking risks in investments. All of this increases tax revenue.

2. Go to the private sector. The US Post Office is a partially private organization that uses its visibility to sell ads and other forms of access to the private sector. This is the concept of the "public-private" partnership, where governments can go to the private sector for money. This can be done in many ways. The basic idea is to leverage city or state assets for such things as advertising or vending. The state receives money and the private sector gets to use public assets for their own benefit. Corporations can begin sponsoring local town or state properties. While this raises many important questions about private control over public goods, it is a means of raising revenue without raising taxes. Ref 2

3. Increase fines that penalize poor choices. This is very different from compulsory taxation. Increase fines for texting while driving, drunk driving, tailgating, aggressive driving, public intoxication, toll violations and other crimes. Increase fines for all violators of health and safety regulations in business, especially the food service industry. Eliminate pensions for all convicted felons. Increases in monetary fines and punishments for stupid choices is an easy and very popular way to raise revenue while punishing the negligent.

References

• The Heritage Foundation: The Historical Lessons of Lower Tax Rates
• ICMA: Public-Private Partnerships: Raising Revenue without Raising Taxes
• Office of Taxpayer Accountability: Ways to Raise Revenue without Raising Taxes