Tax-Financed Campaigns: A Speech-Chilling, Costly, and Failed Policy

January 1, 2018   •  By IFS Staff   •    •  
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Tax-financed campaigns are government-operated programs that seek to replace or supplement private, voluntary campaign contributions with government grants of taxpayer dollars to candidates who meet certain requirements. These programs, often tagged with euphemistic names such as “democracy dollars” or “clean elections,” take many forms. Some provide tax dollars to candidates based on the donations they’ve received while other programs provide citizens with vouchers to give to candidates, which candidates then exchange with the government for cash.

Whatever their form, tax-financing programs impair free political speech and association rights in numerous ways. First, it is crucial to remember that contributing money to political candidates is a protected form of free speech. When the government funds candidates, taxpayers are forced to financially support politicians they may vehemently disagree with. Tax-financing systems cannot deny funding to candidates based on their views or statements, which means that they must accept candidates with all sorts of opinions, even those who are offensive or bigoted. The essence of a democratic system is that voters are free to choose whom to support. The same should be true in a voluntary campaign finance system, but under tax financing, the government props up candidates using taxpayer dollars, even if voters would not have done so if given the choice.

While simultaneously trampling on citizens’ free speech rights by forcing taxpayers living in jurisdictions with such systems to subsidize the political campaigns of those with whom they may disagree, these programs also chill speech by routinely placing arduous restrictions on participants: limits on campaign spending, restrictions on the sources or levels of private fundraising, onerous reporting requirements, and the like. Such conditions would likely be unconstitutional if they weren’t voluntary preconditions for receiving government funding, but some candidates feel that they have no choice but to opt for taxpayer subsidies to fully compete with their opponents or to avoid charges that they’re “dirty” as a result of not running under “clean elections.” The rising costs alone of communicating to a growing number of voters means that tax financing restrictions make exercising free speech harder than it would be in a fully voluntary system.

Proponents argue these programs give more people an opportunity to be part of the political system and “clean up” government by making politicians more accountable. Unfortunately, ample research demonstrates these programs have not produced those results. Incumbent and well-connected politicians have been the primary beneficiaries of these programs, while political newcomers struggle to qualify. It is false that tax financing prevents corruption, and, in fact, these schemes create new forms of and offer fresh incentives for corrupt activity. Tax financing fails to reduce lobbyist or special interest influence in government. The diversity of occupational backgrounds of state legislators does not increase after implementing tax financing, nor does the percentage of female legislators. Giving money to politicians does not save taxpayer dollars in the long run. Voter turnout fails to increase when states institute tax financing. Political competition against incumbent lawmakers does not improve in states with tax financing either.

IFS Staff

IFS Staff