Tax credit for $200 in political giving could encourage small donors
The U.S. campaign finance system is badly broken and desperately in need of new solutions.
In 5-4 rulings in Citizens United vs. Federal Election Commission, in 2010, and McCutcheon vs. Federal Election Commission, in 2014, Supreme Court Chief Justice John G. Roberts Jr. and his conservative colleagues systematically dismantled campaign finance law.
The policy landscape is highly polarized, with the two sides talking past each other. Rather than simply rehearsing the same stale debates, we need to find different approaches. One is to enact a federal tax credit to encourage small donors to contribute up to $200 to a candidate or political party.
Such a tax credit would provide every American who files an IRS tax return with a chance to make a political contribution to his or her candidate or political party. This is an idea first proposed in Congress in the 1950s, and it deserves fresh consideration today.
In the 1960s, President Kennedy urged Congress to use the tax code to encourage Americans to contribute, remarking that “it is essential to broaden the base of financial support for candidates and parties.” Congress passed a bill for such a federal tax credit with a bipartisan vote, and from 1972 until its repeal in 1986, millions of Americans took advantage of it. Although a number of states have established successful tax credit programs, Kennedy’s basic point has been forgotten.
A tax credit would be easy to implement, building off basic aspects of our tax system. It would inject more money from a wide array of individuals into elections and weaken the dominance of the super-rich. The plan would probably garner bipartisan support — establishing a tax credit is in line with basic precepts often voiced by conservatives, who favor programs with credits that reduce the amount of taxes paid by Americans.
Encouraging more people to participate in the political process by donating money to a candidate or political party of their choice furthers core 1st Amendment values, even as interpreted by the Roberts court. In a democracy, everyone should have a voice in decisions affecting their lives. Limits on campaign spending and giving — which have been struck down in Citizens United and other cases — are an essential part of a campaign finance system. They are necessary in particular to lessen opportunities for corruption. At the same time, we also need reforms that encourage more people, of all racial and ethnic groups and economic classes, to contribute to their candidate of choice.
Reformers can take their cue from Roberts, who wrote in McCutcheon, “There is no right more basic in our democracy than the right to participate in electing our political leaders.” Given statements like this from conservative justices, it is highly probable that the Supreme Court would uphold a tax credit designed to encourage political participation.
Lack of participation is one of the most glaring, dysfunctional aspects of our campaign finance system. Most Americans don’t participate in funding elections; those who do are by and large the wealthy few, the 1% of the 1%. With the costs of running for office skyrocketing, candidates depend heavily on their wealthiest donors, often showering them with special access and influence. Hardworking Americans who struggle to put food on the table pay for rising healthcare costs and provide educational opportunities for their children, have little voice in this part of our political system. That’s no way to ensure a vibrant democracy that represents the interests of all Americans.
The Roberts court has turned our Constitution’s promise of democracy of, by and for the people on its head, giving corporations and the wealthiest Americans an outsize influence over our political leaders. Creating a federal tax credit won’t wipe away those rulings or rid us of super donors, but it can empower small donors, broadening the base of those who finance elections. Now, more than ever, we need to consider every viable solution for strengthening our democracy.
David H. Gans is director of the Human Rights, Civil Rights and Citizenship Program at the Constitutional Accountability Center. He is the author of the issue brief “Participation and Campaign Finance: The Case for a Federal Tax Credit.”
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This piece appeared in at least the following additional outlets:
* The Louisville (KY) Courier-Journal (online)
* The Allentown (PA) Morning Call (online)
* The Pottsville (PA) Republican Herald (paper)
* The Waco (TX) Tribune-Herald (paper) (online)