Back in August, Jesse Walker of Reason wrote a brief obituary for Mark Hatfield, the moderate Republican Oregon senator who, it turns out, was interestingly immoderate in a number of ways, e.g.,
It isn’t hard to find cases where the senator backed economic interventions — he was a strong supporter of subsidies to medical research, for example — so it soon became clear that his libertarian streak was not going to manifest itself with a Ron Paul–style voting record. But while Hatfield’s dalliance with Rothbardianism faded, he did regularly introduce a bill he called the Neighborhood Government Act, which would have allowed Americans to divert their federal taxes from Washington to their local community. His long-term goal, he explained to the Eugene Register-Guard in 1973, was to shift all social services to the neighborhood level. The idea was embraced by many New Leftists (in those days when decentralism was a strong current on the left) and libertarians (in 1982, Karl Hess told Reason that the bill was one of “two and only two” legislative changes he would actively support, along with the end of the withholding tax). Naturally it went nowhere.
The substance of the Neighborhood Government Act seems somewhat less inspiring — Hatfield sought to create a series of “neighborhood corportations,” in part so that the money wouldn’t simply be diverted to, say, municipal governments. Regardless, it is an intriguing idea. One wonders what might happen if, in a much stronger version of the proposals, taxpayers were allowed to divert some or all of their federal income taxes to their own state or local governments — or indeed to other state and local governments. Might state and local governments start campaigns to solicit the tax dollars of Americans living across the country? Might the federal government take steps to demonstrate that it was spending money wisely and prudently in order to persuade taxpayers to keep money flowing to Washington?