Here are some answers to frequently asked questions regarding pragmatarianism (tax choice). I've selected the Environmental Protection Agency (EPA) to be my default example.
Wouldn't important government organizations be underfunded?
This is logically impossible because "importance" can only be determined by how much an individual is personally willing to sacrifice for something (opportunity cost). If many taxpayers give a significant amount of their own tax dollars to the EPA then, and only then, could we say that the environment is important for Americans.
Wouldn't taxpayers have to be better informed for this to work?
If environmentalists and the EPA have a good reason to believe that the environment should be a higher priority for taxpayers...then it would be their responsibility to share their information with taxpayers. With the current system, taxpayers can't choose where their taxes go...so it would be pointless for them to make the effort to learn about the environment or the EPA's efforts to protect it. Therefore, pragmatarianism would eliminate rational ignorance.
How would it work?
At anytime throughout the year you could go directly to the EPA website and make a tax payment of any amount. The EPA would give you a receipt and you'd submit all your receipts to the IRS by April 15. Anybody who didn't want to shop for themselves would have the option of giving their taxes to their impersonal shoppers (congress).
How specifically could taxpayers allocate their taxes?
The granularity would be determined by the EPA and its supporters. The greater the granularity, the less control the EPA would have, but the greater its knowledge of taxpayers' environmental priorities. Any disparity in environmental priorities would reflect disparities in information. Taxpayer choice would increase information intercourse.
How would the tax rate be determined?
Congress would still be in charge of the tax rate. If they set the tax rate too low...or too high...then they would lose revenue. This is because taxpayers would boycott congress if they weren't happy with the tax rate. For example, if the tax rate was 40%, but taxpayers derived 60% of their value from the public sector, then they would be unhappy with the tax rate. If congress wanted to earn more revenue, then they would increase the tax rate. So the optimal tax rate would be the rate at which congress maximized its revenue. For more info please see Tax Choice Tax Rate.
Wouldn't this give too much influence to the wealthy?
Creating a market in the public sector would show us the exact percentage of the population that gives their taxes to the EPA. If this percentage is too small (insufficient demand breadth), then taxpayers would no longer have the option of giving their taxes to the EPA. Therefore, in a pragmatarian system, the wealthy would only be able to fund truly public goods (goods that are broadly beneficial). This means that pragmatarianism would eliminate the problem of concentrated benefits and dispersed costs. For more info please see...Visualizing And Evaluating The Public Goodness Threshold.