Imagine a country where once a year, the citizens file a sort of vote with their tax return, where each return decides how taxes will be spent. Each citizen controls an equal portion of the taxes, regardless of income.
Taxes are allocated to programs. Anyone can establish a program by getting 0.5% of the citizen population to provide their signature endorsing the program. Programs are not allowed to violate any existing laws, and must publish an itemized report of where the tax money was spent.
Each citizen who files taxes gets an equal say. They are allowed to split the vote between any number of programs with up to 0.1% precision.
For example, suppose our country earns 1 billion dollars in tax revenue and has 1,000,000 citizens as population who file taxes. In this example, a program would require 5,000 votes to become established and each citizen would be responsible for determining the allocation of $1,000.
Someone might choose to put 50% on a program to cure cancer, 20% on a program that repairs a highway they use regularly, 7.5% on a space exploration program, and the remaining 22.5% on a project to end homelessness by providing affordable housing for people. In that case, 500 dollars of the tax revenue would go to the cancer program, 200 dollars to the highway repair program, 75 dollars to space exploration, and 225 dollars to the homelessness project.
Each year the projects would receive their budget based on the votes and the total taxes collected. Votes would be collected securely and projects would not be told who had voted for them.
Now, I want you to come up with ways to break or game this system. Please assume the following:
- The country has a democratically elected leader.
- The country has free speech and nobody removes that right. This is in the modern age, so there is easy communication.
- The country has functional laws preventing theft, murder, coercion, rape, dangerous drugs, etc... ie a standard functional legal system.
- Programs do not ever find out who contributed to them. They only receive the total dollar amount.
- The voting is properly counted.
- There is a working secure way to verify the identity and authorization of the filing citizen.
I want you to find the worst fraud or corruption that could happen under this system. I want to figure out how this proposed system could fail, in the worst way you can think of. In short, I want to figure out what negative outcomes could or should develop in this proposed country.