Taxpayer Collective Bargaining—Worth Considering?

By Andrew Horton, April 2024

Here we’re introducing for the first time, an innovative concept for discussion, called Taxpayer Collective Bargaining (TCB). It just may be an approach that achieves win/win outcomes for taxpayers and society-at-large. The intent of TCB is to achieve win/win results based on strong theory and applied results, separate from political activist objectives.

Government spending, deficits, debt and inflation continue to persistently grow. But polls show that taxpayers still aren’t satisfied with spending and results. That’s an unsustainable path, and it’s where Taxpayer Collective Bargaining can help. Taxpayer Collective Bargaining essentially proposes that existing labour legislation be duplicated over as a model to apply to taxpayers. Just as labour unions unify individuals to assert the interests of labour, TCB unions will assert the interests of taxpayers generally as a collective.

Currently voters are only able to select representative government based on ideology and directional policies, but when it comes to funding, there’s no up-front and ongoing check-and-balance that protects the taxpayer from overreach. Governments routinely increase taxes, run deficits, borrow and print money as they face demands from professionally organized lobbies across the political spectrum. The taxpayer is not represented or included in this process. Since the government is not spending its own money and directly benefits in many cases from increased funding, the perpetual increases are not surprising and are predicted by behavioral science.

TCB brings together taxpayers as a collective, just as unions do for labour and boards do for corporate shareholders. By implementing TCB, the government and taxpayers would have to legally negotiate a binding contract as an agreement during each funding cycle. When they cannot initially come to terms, mediation and arbitration would apply as it routinely does to overcome gridlock in negotiations between employers and unionized employees.

There are challenges to this approach, because in our democracy there is naturally a spectrum of ideologies. On one end of the spectrum will be taxpayers that seek very high levels of government spending and taxation and on the other end of the spectrum will be taxpayers that seek extremely low levels of taxation and government spending. A TBC unit (federal, provincial, municipal) would have to be completely free and open to participation and only be able to negotiate with the government on behalf of taxpayers if a clear majority of taxpayers choose to be members and vote for the proposal put forward by leadership. To ensure full participation and inclusion across society, it is important that all citizens can participate, even if they are not actually net taxpayers. TCB in no way interferes with the normal process of democratic representation of all voters. It simply puts some discipline on the funding process from the stakeholders that pay for government spending.

The political left and right will likely always have differing views on appropriate levels of taxation and spending. TCB does not, and never should, replace that democratic freedom. TCB is not about political ideology, and what is right and wrong. It is very important that TCB not be taken up as a tool of the political left or right. Under TCB, government spending and taxation don’t have to be higher or lower. The sole purpose of TCB is to be a tool of the moderate majority to ensure spending on priorities, focused on transparency, accountability and financial prudence to ensure stability over time. TCB empowers the moderate, democratic majority that pay for the government, to come to reasonable financial terms with the government that align the interests of taxpayers and all of society broadly.

There are many interesting opportunities that can come out of the TCB approach. For example, restrictions can be placed on deficit levels, debt levels, minimum spend in areas, maximum spend in areas and even innovative elements such as tying funding to goals and releasing funds upon the achievement of milestones. But, our system is highly entrenched and does a lot of good at its heart. We are very fortunate to live in free democracies, enjoying the rights and freedoms that we do. There should be no desire to destabilize this foundation in our great country. TCB should be considered as a supplementary approach to fill the gap that currently exists in taxpayer representation and government accountability. The cost of not closing this gap is the dangerous onward march of excessive spending in some areas, lacking spending in others, persistent deficits, debts and money printing. These are pressing risks to strong, stable, fair and free and sustainable democracies.

To reiterate, TCB is not grounded in politics. It is based in economics, causal economics in particular, stressing the importance of balancing negotiating power between groups to arrive at the most sustainable win-win outcomes. It may seem counterintuitive that causal economics and its focus on free markets would assert the creation of another market intermediary. However, government spending and funding are not part of a free market and individual taxpayers have no power to negotiate specifically on funding. Elections only determine the general ideological direction of the government. From there, government can legislate, spend, tax, borrow and print money extensively until the next distant election. And by that time, what’s done is done. As they say, “the money’s all gone!” And then some. Taxpayers want a seat at the financing table before the money is committed, collected and spent. Any government that serves the people will understand and embrace this important partnership, just as they do when working with organized labour.

Theory aside, real-world evidence of budget strains and dissatisfied taxpayers shows that we need to be open to new ideas. It just might be time for taxpayers to learn from labour unions and get themselves organized in the same way! Or at least it’s worth giving TCB a try on a small scale. So what’s the next step?

TCB doesn’t yet exist in practice, so the first step is the coming together of existing taxpayer advocates with lawyers to recast existing labour legislation into the context of a taxpayer, government collective bargaining process. Where possible, grounding in constitutional law should be incorporated. But not to complicate things, the overriding approach should be as much as possible porting over the existing framework and not reinventing the wheel—for the sake of not getting caught up in endless obstacles.

If you’re not convinced of the need for government to have relevant impact and maintain financial accountability, below are some sobering statistics to drive the point home. Take a look and then reach out to get involved if you believe it’s time to give TCB a shot, perhaps starting at the level of a small municipality that wants to make history!


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