How the $ 3 Campaign Contribution checkbox works on your tax form

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Reader Tracy Shaw of St. Petersburg, Florida asked:

Every year, when I do my taxes, there is a box to check if I want to contribute to the public financing of the elections. He specifies that this “will not increase your tax or reduce your refund.” So what happens when I check this box? Where does this money come from? Is it really a contribution if it doesn’t increase my tax or reduce my refund?

When doing your federal taxes, the form asks you to check a box if you want to contribute $ 3 as a sole filer, or $ 6 if you are filing jointly, to the Presidential Election Campaign Fund.

Every time Tracy Shaw files a case, there she is – that question is up to her. But she never felt pressured to say yes.

“I never checked it out because I’m like, ‘I don’t really understand that. I don’t know why it’s here, and I’ve never checked it before, and it worked well, so I’m going to stick with that, ”Shaw said.

Robin Kolodny, professor of political science at Temple University, explained that this money comes from the income tax you pay to the Internal Revenue Service.

“Let’s say you pay $ 100 in taxes and check the box. So the first thing they’re going to do is take $ 3, ”Kolodny said. “And instead of sending it to the general fund at the Treasury Department, they’re going to send it to that account at the Federal Election Commission, and then they’re going to send $ 97 to the general fund.”

Eligible presidential candidates can use the money donated to this fund to pay for their political campaigns in primary and general elections.

But let’s say you don’t check it. Kolodny pointed out that the $ 3 will be part of general government revenue, which will fund programs and purchases that you may or may not be in favor of, like military spending. The difference is, you can’t unsubscribe from it.

Who can use these funds?

Kolodny said this levy is the only source of public funding for elections at the federal level. It first appeared on tax forms in the early 1970s, initially allowing taxpayers to designate $ 1 for this purpose, or $ 2 on joint returns, according to the Congressional Research Service.

She said the fund was launched and modified in response to events such as the Watergate scandal and the influx of more than $ 1 million in donations to politicians like Presidents Lyndon Johnson and Richard Nixon.

Kenneth R. Mayer, professor of political science at the University of Wisconsin, Madison, said the program was intended to “make candidates less dependent on private contributions from individuals, political action committees and parties.”

Between 1976 and 2012, program funds also went to presidential nomination conventions for Democrats and Republicans (as well as partial funding to qualified minor parties), according to the FEC. But in 2014, then-President Barack Obama signed a law to prevent conventions from receiving these funds.

Presidential candidates must meet several conditions to receive funds during the primaries. They must raise at least $ 5,000 in at least 20 states (a threshold of $ 100,000). On top of that, each state’s $ 5,000 must come from 20 backers. The FEC uses this as a litmus test to demonstrate whether a candidate can gain broad public support.

If they qualify, the FEC will match the funds applicants receive from donors, but they have a spending limit. In 2020, the limit for primaries was around $ 52 million.

If the candidates of a large party want public funds for the general election, they cannot accept private contributions for their campaigns, nor can they spend more than the grant they receive. In 2020, the FEC reportedly provided $ 104 million to those who agreed.

In primary and general, the FEC also allows candidates to spend a relatively meager $ 50,000 of their personal funds in each race.

A major party candidate has not accepted public funds for the general election for over a decade. In the 2008 race, the Republican candidate, then-Sen. John McCain, opted for the system, receiving a grant of $ 84 million.

But his opponent, Obama, chose not to. According to OpenSecrets, Obama managed to raise $ 745 million at the end of the election cycle.

A political “arms race”

The box is a holdover from a time when candidates took advantage of public funding. Mayer said that prior to George W. Bush’s presidency, it was actually the norm for most leading candidates to take these funds for their primary and general election campaigns.

Kolodny said the fund has helped candidates like former President Jimmy Carter, who was relatively unknown when he ran against incumbent President Gerald Ford in 1976.

During the 2000 cycle, Bush became the first candidate to deny public funds for primaries and caucuses.

Since then the numbers have grown a lot more. Mayer said the amount applicants need to spend now, and the amount they can raise, is well beyond the spending limits they should agree to.

“It’s what game theorists call an arms race,” Mayer said. “The amount of campaign expenses is steadily increasing. Applicants will spend what they think they need to spend to be competitive.

Fundraising is much easier now, he added, thanks to online platforms like Democrats ‘ActBlue and Republicans’ WinRed. The 2020 election cycle was the most expensive in U.S. history, with combined spending in presidential races and Congress reaching $ 14.4 billion, according to an OpenSecrets analysis of FEC files.

The future of the fund

Shaw is like most American taxpayers, who choose not to pay their $ 3. In 1976, about 28% of taxpayers ticked the box, according to FEC data. Since the late 1970s, support has steadily declined, falling to around 4% of filers in 2020.

“I imagine most filers don’t quite understand the system,” Mayer said, offering this as an explanation for the drop.

Kolodny said taxpayers who know politicians aren’t using the fund would have no reason to bother checking it out.

While the number of taxpayers who decide to contribute has slowed, the government still has $ 400 million in untapped funds that have accumulated over the years.

Mayer and Kolodny said there is no rush to deal with the money that is there because it is not so much in the grand scheme of things. Doing something with these funds is just not a priority for most politicians struggling with other issues.

“No member of Congress thinks his re-election will be won or lost as to what to do with the FEC money,” Kolodny noted.

Kolodny claims to give a certain proportion to the Federal Election Commission itself, which is understaffed and needs to update its cyber infrastructure.

These funds have been reallocated in the past. In 2014, money that would have been spent on presidential nomination conventions was redirected to a 10-year pediatric research initiative of the National Institutes of Health, according to Anna Massoglia, the OpenSecrets researcher.

Massoglia said some members of Congress have proposed using the money to, for example, reduce the federal deficit. She said it could also be used to continue funding the pediatric initiative, which is set to expire in 2023.

For this program to regain its relevance, said Mayer, we will need to increase spending and grant ceilings “by a factor of 10”.

“At one point, the program played an important role in making candidates less dependent on private contributions from individuals and political action committees, but it just doesn’t have that function anymore,” Mayer said.

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