Voluntary Taxation and Beyond - The Promise of Social-Contracting Voting Mechanisms

Abstract

Would you volunteer to pay a carbon tax if 99% of other Americans also volunteered to pay such a tax? Instead of traditional referenda, it is possible to structure plebiscites which would only bind a subset of the population (e.g., to be subject to a carbon tax) if that subset’s individually chosen conditions for participation are met. While provision-point mechanisms with exogenously set provision points have garnered billions of dollars in private contributions, a broader class of “social contracting” mechanisms exist that allow individuals to bid on their preferred provision points. This article shows how both partial and probabilistic bidding schemes might foster voluntary subpopulation participation in a range of public good applications (including sexual assault reporting and civil disobedience), and reports results from a series of randomized surveys of Internet respondents assessing the potential support for such subgroup “social contracting.” The respondent bids would, for example, support an equilibrium in which approximately 25% of the public would voluntarily commit to pay an additional 10% tax on electricity.