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 people are willing to sacrifice for something (opportunity cost). If many taxpayers give a significant amount of tax dollars to the EPA then, and only then, could we say that the environment is a priority for the American people.
Wouldn't taxpayers have to be better informed for this to work?
If environmentalists and the EPA have 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.
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' true preferences regarding environmental priorities.
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 taxpayers would let them know by giving them less positive feedback (tax dollars). So the optimal tax rate would be the rate at which congress maximized its revenue.
Wouldn't this give too much influence to the wealthy?
Creating a market in the public sector would show us the percentage of the population that gives their taxes to the EPA. If the percentage is too small (insufficient demand breadth), then taxpayers would no longer have the option of giving their taxes to the EPA. Therefore, the wealthy would only be able to fund public goods (goods that are broadly beneficial). For a more in depth explanation please see...Visualizing And Evaluating The Public Goodness Threshold.