The excellent folk at the FiveThirtyEight Politics Podcast have been running an interesting exercise, where members of the public write in to say what topics surrounding the recent US Presidential election they have been discussing around their kitchen tables, and what reforms they would like to see made to the electoral system.
One comment that caught my attention was the following:
“Number one, why is election day not a national holiday where everyone should be able to go out and vote, and number two, [I propose] offering a $1000 tax credit when you prove that you voted.”
This is a fascinating idea for a multitude of reasons. Increasing participation in the electoral process has been much debated in the United States; rates of participation are typically around 50% of the electorate, low for the OECD club of developed countries. For comparison, Australia maintains exceptionally high participation rates at 91% in the last federal election, largely attributed to a policy of compulsory voting. Eligible voters who do not cast a ballot are fined a $20 AUD penalty, which despite being a relatively small amount of money ($15 USD or £12 GBP) is enough to drive high participation rates.
However, plenty of arguments have been made against compulsory voting, from ethical (is it democratic to force citizens to vote?) to the practical (does compulsory voting increase the rate of protest or erroneous votes?). For a variety of such reasons other democracies have been reticent to follow the Australian model of compulsory voting. Which is why the suggestion above is interesting, as it offers the carrot instead of the stick, so to speak. A $1000 tax credit is a very attractive proposition, and would surely draw many voters who would otherwise stay away from the polling booth on election day. But could the US, or indeed any country, bankroll such a massive effort to bring voters to the polls?
Let’s look at the numbers. The US had 251,107,000 eligible voters in the 2016 presidential election. The final number of participating voters is still unknown due to late counting in some states, but from the majority of states we can estimate a turnout rate of 59%. We have no idea of knowing how many of the 41% who stayed home would have been attracted to vote if a tax break had been on offer, or indeed how many of the already-voters would claim their tax break. But if we assume a financial worse case scenario, where all eligible voters turn out and all claim their allotted $1000 tax break, that would be a $251 billion deductible from the national coffers. For comparison, that is an amount roughly equivalent to the entire yearly budget of the US Department of the Treasury, or about half the budget of the Department of Defense.
But what about the first part of the listener’s suggestion? If everyone in the US stopped working for a day, would we see a significant cut to US economic productivity? Once more, let’s look at the numbers. The combined revenue of income and payroll tax for the current period stands at $2.91 trillion dollars, or 81% of all US government revenue. If we take out a slice corresponding to a single working day on election year, it would represent a $7.97 billon dollar loss to the Federal Reserve. While significant, it pales in comparison to the expense of providing a $1000 tax break to every voting citizen.
So the combined cost of this carrot-before-the-stick exercise would be in the region of $260 billion dollars. That is, suffice to say, a lot of money – it is roughly equivalent to the entire GDP of Chile or Pakistan. But is that a lot of money for the US government? The total US government revenue for the current fiscal year is estimated to be around $3.6 trillion, so our voter turnout programme would cost 7% of all revenue the government receives, or 1.4% of GDP. The current GDP growth rate of the US stands at a healthy 2.2%, so knocking it down by 1.4% would not automatically trigger a recession, but would significantly slow down the recovery from the 2008 financial crisis.
While obviously lost tax revenue is not directly convertible to GDP and the cost of any such programme of voting enticements would be spread over the four years between elections with special provisions for a newly instituted holiday, it is nevertheless a gargantuan amount of money, so keep that in mind next time you decide to give everyone a thousand dollars.
US Department yearly budgets are released by the Congressional Budget Office. Nominal GDP values per country, including the US, are from World Bank figures for 2015. Annual GDP growth figures are from 2016 estimates also from the World Bank.