New Report: Small Donor Tax Credits Proposal
The vast majority of Americans, whether liberal or conservative, Democrat or Republican, believe that the campaign finance system needs “fundamental changes,” or that it should be “completely rebuilt.” The system is out of balance, with big money having far too much influence over policy, drowning out the voices of ordinary voters.
Today, a new report from the Brennan Center for Justice at NYU School of Law, Small Donor Tax Credits: A New Model, proposes a way to give greater voice to average citizens in the face of a rising tide of million dollar contributions: reintroduction of a tax credit system for small political donations, retooled for the 21st century.
A modern tax credit system, whether at the local, state, or federal level, should contain the following elements:
- Tax credits should be easy and inexpensive to claim: Individuals should be able to claim the credit either online or by giving their tax information directly to the candidate or political party they wish to support.
- To strengthen parties and to ensure that candidates’ funding comes from their constituents, taxpayers should be able to claim two distinct credits: One for contributions to candidates from their state, and one for contributions to political parties. At the federal level, the Brennan Center suggests a $50 credit for each contribution per election cycle.
- Tax credits should be valuable enough that candidates actively solicit them: In addition to being easy to use, taxpayers should be able to “bank” their credits for use in the next election cycle. This will increase their value over time, and candidates will be more likely to pursue contributions from new donors.
- Jurisdictions should pair tax credits with other reforms that further increase the voice of small donors: This could mean matching small contributions above the amount eligible for the tax credit, or requiring reasonable limits on large donations or spending for candidates who accept credited contributions.
“Any effort at comprehensive campaign finance reform should increase and diversify participation in the electoral process, by having a greater pool of Americans provide campaign contributions,” said Larry Norden, Deputy Director of the Brennan Center’s Democracy Program, “Additionally, it should encourage candidates and parties to focus more on connecting with prospective voters, by having them spend more time, including when fundraising, with those voters, and reduce barriers to entry that discourage everyday Americans without access to big donors from running for office.”
Read the full report, Small Donor Tax Credits: A New Model.
Read more about the Brennan Center’s work on Money in Politics.
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