Hillary Won’t take Tax Dollars: Feel the Corruption!

Hillary Clinton has announced that she will not take taxpayer money to fund her race for the presidency, either in the primaries or the general election.  If she sticks to her decision and wins the Democratic Party nomination, she will be the first candidate to turn down federal tax dollars to run in the general election for president.  But it is quite likely that the eventual Republican nominee will do the same.  Is this the death knell of the tax financing system in presidential races?  Quite possibly.  Does it matter?  Almost certainly not. 

Major candidates have been slowly but steadily opting out of the federal tax funding system.  In 1996, Steve Forbes pursued the Republican nomination without taking tax funds.  In 2000, both Forbes and George W. Bush refused federal tax funds to seek the Republican nomination, although Bush, after winning the nomination, took the tax dollars offered for the general election.  In 2004, Bush, along with Democrats Howard Dean and John Kerry, refused to take tax dollars during the primaries, but both Bush and Kerry took the money for the general election – something Kerry has since often called a mistake. 

Meanwhile, voters are opting out of the system as well.  The system is funded by a voluntary tax checkoff, or earmark, that voters can make on their tax returns.  Doing so does not raise their taxes.  Nevertheless, participation in the tax financing earmark, which peaked in 1980 at about 28 percent, has steadily declined since, and is now below ten percdent.  In 2005 Federal Election Commission Chairman Scott Thomas and Vice Chairman Michael Toner pressured leading tax software suppliers to make it more difficult for taxpayers to check the "no" box, but that doesn’t appear to have much effect.  So the system sits rejected by both candidates and and the public.  Clinton’s declaration merely ratifies what most observers already knew.

 The "reform community" will no doubt be out bemoaning the sad fate of the tax funding program.  But why?  The main argument, of course, is that tax funding prevents corruption.  Funded by government, candidates won’t be "corrupted."  But this is not an argument to be taken seriously, at least not at the presidential level, where all the candidates are well known.  There are certainly many people – mainly Republicans! – who think that Hillary Clinton is corrupt.  But I think it fair to say that no one seriously thinks that her decision not to spend tax dollars on her campaign, but to use voluntary private contributions, makes her any more or less ethical.  Similarly, there are many Democrats who believe that George Bush is beholden to big business.  But I would venture to say that few think that his taking or not taking government funds to run for office shapes that perception.  No one, to my knowledge, seriously suggested in 2004 that Howard Dean or John Kerry suddenly ceased being dedicated public servants and became corrupt political hacks when they decided to fund their primary campaigns with voluntary contributions.

The "reform community" also argues that spending tax funds on campaigns increases the number and viability of candidates.  This seems unlikely, and even if likely, hardly seems necessary.  Already, the the following men and women have indicated that will run for president in 2008 or are at least exploring a bid:

Democrats: Senator Clinton; Senator Barack Obama; Senator Joe Biden; Senator Chris Dodd; former Iowa Governor Tom Vilsack; New Mexico Governor Bill Richardson; former Senator Mike Gravel; former Senator John Edwards; and Representative Dennis Kucinich.  Also frequently mentioned as possible candidates are Senator John Kerry; former Vice President Al Gore; and retired General Wes Clark. 

Republicans: Senator John McCain; former New York City Mayor Rudy Giuliani; former Massachusetts Governor Mitt Romney; former Virginia Governor Jim Gilmore; former Wisconsin Governor Tommy Thompson; Representative Ron Paul; Representative Duncan Hunter; Representative Tom Tancredo; and Senator Sam Brownback.  Others mentioned as likely candidates include former New York Governor George Pataki, Senator Chuck Hagel, former House Speaker Newt Gingrich, and former Arkansas Governor Mike Huckabee.  It is still 1 year before the New Hampshire primary.  Certainly other names may surface.

If the presidential system of tax financed campaigns were abolished tomorrow, we could rest assured that few Americans would miss it. 

For more thoughts on the system, see earlier CCP blogs here,  here, and here.  and this Washington Times column.

UPDATE:  As expected, the hue and cry has begun this morning.  The New York Times, carries a "news" report with glowing descriptions of tax financing worthy of any editiorial page (but not as funny as a typical 0ver-the-top Times editorial on this subject).  The Times seems certain that this is a very bad development, though it can’t really list any actual benefit from the system.  The Washington Post offers this more balanced report.

We can’t help but note that buried in the Times report is this nugget: "Beginning with the first quarterly disclosure of presidential campaign finances, due at the end of April, candidates can show off their cash on hand as a deterrent to competitors." Given the unquestioning support that the "reform community" gives to all things labeled "disclosure," we find this interesting.  We support disclosure of large contributions, but this is further evidence that disclosure is not without its downside.  Perhaps we were better off when the press paid less attention to fund raising and more to candidates and issues.

The Center for Competitive Politics is now the Institute for Free Speech.