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Proposal: Counter Big Donor Influence with Small Donor Tax Credits


The Issue

Problem Defined



* Sources: US Census Data, Pew Research Center 

Expand all bullets


* Sources: US Census Data, Pew Research Center

2. Incumbents have a huge advantage over challengers in raising moneyMORE







5. Our campaign finance system results in skewed policy outcomesMORE





Source: Center for Responsive Politics


7. Key campaign finance definitions and court rulingsMORE





  • $2,600 per candidate per race
  • $5,000 per year to a PAC
Go deeper




Taxes and Political Contributions





Thom Cmar - PIRG Report (2004)



Affluence and Influence: Economic Inequality and Political Power in America




Political Action Committees

Center for Responsive Politics - (2015)



Expert Authors



Andre Delattre
Executive Director - US Public Interest Research Group






Richard Painter
Professor - University of Minnesota Law School









John Pudner
Executive Director - Take Back Our Republic






Dan Smith





The Solution

Proposed Actions
Expand all bullets



2. Make it easy for people to claim the tax creditMORE


3. Ensure all Americans are aware of the tax creditMORE


Expected Results
Expand all bullets
1. The percentage of citizens contributing to political campaigns will increaseMORE








5. Politicians' policies would better reflect the American publicMORE


Budget Impact


- 142 million registered US voters



Net Present Value


The Conversation

7 months ago
What excatly is a SUPERPAC? and what benefits or downfalls does it bring to the table?
7 months ago
I think that offering the $100 tax credit gives people the incentive that they might need to contribute. It will be something for them to look forward to and not think they are doing everything for nothing. I think this is a step in the right direction.
7 months ago
I small tax credit would definitely get more people to want to vote
7 months ago
7 months ago
Why is that no difference
7 months ago
Find out how we can educate people how donations or voicing their opinions can help
7 months ago
Social media is a way to spread knowledge quickly.
7 months ago
I feel like the small tax credit would get the american people more into politics, whether it'd be donating or just staying involved in politics today.
Sarah Anderson
Security at the US-Mexican Border
7 months ago
Make a fixed time of year that people can donate to campaigns and don't make a specific amount of money that can be donated. If all this happens, then more voters can donate and not just upper-class people.
7 months ago
Why do you feel that there should be a fixed time when donating is allowed?
7 months ago
Offer a tax credit to individuals who make a contribution. Although such a tax credit will not solve our entire campaign finance problem, it represents one positive step to empower American voters and increase their participation in our political system. If an individual is already owed a tax refund, the refundable credit will be added to the amount of the individual's refund.
7 months ago
I completely agree with you. I think this could be one positive step in the right direction.
7 months ago
Donors normally take in contributions from those people and companies that are very rich, and with all that wealth comes power. The Campaigns are going to support the interest of the people and companies that contributed the most, making the middle class citizens voice not heard.
7 months ago
Rich donors who have the means to contribute high amounts of money to the campaign of their choice, are generally then, putting themselves in a position of power. The campaign often feels obligated then, to support the wishes of the rich when they get into office. The middle class citizens who are financially unable to make large contributions to the campaign of their choice are not as well represented in their wishes as the rich.
7 months ago
9 months ago
Although smaller iterative changes like a $100 campaign donation tax credit are easier to accomplish, will they really change the game much? Would it be wiser to put in the hard work to establish a public campaign finance approach that uses our tax dollars to finance candidates. The approach could eliminate outside funding altogether, cap the amount spent on a campaign, provide incentives for first time candidates, etc. to create a level playing field for a wider variety of candidates.
2 years ago
Representatives should be required to spend a majority of their time working for their constituents and not raising money. Limit not just the amount, but the time they can spend raising money and "meeting" with donors who are not their constituents. A representative should only represent the people who can vote for them and not those outside their electoral area and not corporations.
a year ago
This is interesting. What if federal office holders were only allowed to receive donations during a fixed one-month period each year?
Sarah Anderson
Security at the US-Mexican Border
7 months ago
If there is fixed time period each year, then more voters can donate to the campaigns.
2 years ago
We should absolutely take corporate money out of politics. If offering a tax credit would help regular people contribute to politicians/causes they believe in I would be in favor of that.
2 years ago
As a person who lives on SSDI, I am not required to file a tax return and I have not for several years. I believe this proposal would leave out the poorest and most vulnerable in the US.
David Fridley
2 years ago
Even if people could get a tax credit of $100 and they knew about it, and it was easy to get, it's won't make a difference. Elected federal representatives need to raise so much money that they focus their time on those who can go much much higher.

We need a bigger, more innovative solutions:

What if we required the candidates to only raise money from their constituents
What if we put in term limits (like 1 or 2). After representatives have reached the limit, they don't have to worry about raising money any more, and then they wouldn't need to focus their time listening to big donors.
What if we put in limits on when representatives could collect contributions to XX months before the election.
What if we made a rule where candidates couldn't spend money trying to get elected - everything had to be volunteer or through free social media.

I'm not saying any of these are good ideas, but I'm saying we should engage the innovative juices of America in finding solutions that will make much more difference. $100 is too small to make a difference, lets think outside the box.

George Schramm
Outreach Marketing
2 years ago
Is there a reason the Senate and House have such a varied level of finance support, other than Senate seats being rarer?
2 years ago
Based on the precedents, offering tax credits seems like an effective way to encourage small donors. But why is there only a few precedents?
7 months ago
It seems like a weird solution because it is pretty much like the government is funding the campaigns and not the people. They are just letting the people make the choice of who the money goes to.
Claire Kopsky
College Student
2 years ago
Offering the tax credit is a step and a decent incentive for the American people, as we live in a world that oftentimes requires an incentive to act. To make the tax credit effective in the goal of helping the visibility of candidates, the communication of the tax credit in a fair and even way across all demographics of our country is crucial. If the communication is prioritized, the tax credit might be effective.
3 years ago
3 years ago
3 years ago
Why does it seem like the small donors have had much more influence than the large donors and the super PACs this primary season? Has Citizen United really created as much influence for the super wealthy as I feared it would?
Lisa Goldman Forgang
Chief Policy Officer
4 years ago
Why did the federal government stop offering the tax credit in 1986?
John Pudner
Executive Director
4 years ago
It was part of the budget deal that threw out all kinds of credits. Some who were there said most regretted this one being removed since it encouraged participation, not preferential treatment for certain groups like some tax credits, but to get the deal done they signed off.
4 years ago
This visibly demonstrates to each citizen that their contributions, their voices can play a role in deciding who gets to be elected. It's a very grassroots idea!
David Wolfson
Retired Engineer. Travel Agency Owner
3 years ago
As noted, we've been through the tax credit idea before and it was stopped. Regrets aside we need to be doing something different than further complicating the tax system. We should be simplifying,not complicating. Also this solution nibbles at the symptom rather than get at the core issue. The reason why candidates need so much money in the first place needs to be addressed. I'd be in favor of limiting the time advertising or advocating for a candidate or party - similar to how it works in Britain.
4 years ago
I don't think a $100 tax credit will be enough to entice voters to donate. Maybe we could increase the tax credits?
Claire Kopsky
College Student
2 years ago
What about a percentage of the donation as the tax credit?
7 months ago
I don't think we should increase tax credits.
4 years ago
In my state, the NRA continues to support John McCain even though he switched stances on gun rights and restrictions. He received over $500,000 from them between 1989 and 2012. If that's not a case of special interest groups preferring incumbents then I don't know what is. I'm a gun rights advocate by the way.
Jackie Sanders
Kindergarten Teacher
4 years ago
I live in a small rural town where we don't have publicly financed elections at any level. I tried to challenge our state representative, but I couldn't even get 10% of votes in my own district because voters weren't familiar with my name. He ended up winning in my district even though he has a very low approval rating.
3 years ago
What is the most challenging aspect of running against the incumbent state representative?
3 years ago
This issue is important and shows the need to why more and more individuals need to be informed and engage in local political figures no matter how small or big a place it.
Zack Mercer
4 years ago
In 2004 I voted for George Bush, but my union donated hundreds of thousands of dollars to John Kerry. I wish there was something we could do to keep our union leadership from going against our individual political interests?
4 years ago
I remember tax credits in the 1980s. I donated $80 to Reagan's campaign and received a $40 refund. It really helped citizens like me beat PATCO!
Stephanie Luster
Lead Architect
4 years ago
Citizens United allows corporations and unions to spend unlimited amounts of money on elections provided that they are made "independently" from a candidate's campaign itself. In a way, don't many union contributions consist of small donors anyway? Small donors could contribute to a candidate indirectly, through union memberships, and directly, through a donation that will be refunded.
4 years ago
If I donate to a single campaign over a 2 year period, will I receive one lump-sum refund?
John Pudner
Executive Director
4 years ago
You can only use it once per year. In states like Oregon that have it now, there is a big rush by candidates and causes to see if like minded constituents will give to them first after the new year starts, since that is the only tax deductible one unless you break it into several $10 donations.
4 years ago
What if big donors just respond to more small donor participation with even larger contributions that increase campaign costs even further?
Felicia Obermayer
Head Curator
4 years ago
In 2008 I donated $80 to Barack Obama's campaign. A month later he "personally" e-mailed me again asking for another donation. I contributed $30 more dollars and I received another e-mail 3 weeks later requesting another donation. Small donors will have to run their pockets dry to actually compete against PACs.
2 years ago
I agree. Those 0.5% people have such deep pockets. I don't think small donors can counteract the influence of wealthy people.
Troy Williams
4 years ago
Campaign costs are increasing because big donors are increasing their contributions in elections. Maybe the solution lies not in directly empowering the small donor with expensive tax credits but in further limiting the contributions that PACs and committees can make.
4 years ago
Congress might have a 14% approval rating, but is that the average approval rating of those congressmen individually or as one political body?
Tseren Zurganov
Junior Policy Analyst
3 years ago
The 14% approval rating figure assesses the performance of Congress as one political body.

Deborah Devedjian
Founder & Chief Citizens' Officer
3 years ago
Definitely the body politic! Ironically, and in general, constituents will say that their particular member of Congress performs far better than Congress as a whole.
Maria Anderson
Executive Director
4 years ago
Many incumbents receive generous donations from big donors even when they're running unopposed. I think this has to be outlawed as much of that money is spent on opulent lifestyles.
Charlie Fort
Senior Vice President of Production
4 years ago
How about a constitutional amendment to overturn the Supreme Court's Citizen United decision instead of waiting for new Supreme Court judges who will be committed to its repeal? A tax credit for small donors simply won't be enough.
Ruth Melian
Community Volunteer
4 years ago
We have to start somewhere. This should be the beginning of many more steps to be taken. Plus, you can't make huge changes at one time because it won't be palatable to the general public.
Andrew Guthridge
Board Chairman
4 years ago
Can something more be done against Super PACs? Small donor contributions will not be able to match the power of Super PACs even after the tax credit incentives are enacted.
Andrea Meyers
4 years ago
Perhaps we could tax Super PACs on the contributions they receive and use those funds to finance the tax credits.
3 years ago
It's interesting concept. This actually makes the tax credit even more progressive. Even redistributive -- as wealthier folks contribute more to Super PACs, more is made available to those on the lower end of the income spectrum.

This proposal is now closed.


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