Facing a lack of revenue for needed projects, Italy, France, and Britain began to use lotteries in the 16th Century as a way to entice citizens to voluntarily fund these projects. The lure was something they might win. Lotteries gained popularity in the next two centuries. In the public’s mind, lotteries had gone from a sinful obsession to civic duty.
In the early days of the settlement of North America, lotteries were used to ensure the survival of Jamestown. When the American colonies revolted from British rule, the Continental Congress tried to use a lottery to fund the war effort. This effort was not successful because the new country’s currency fluctuated widely in value.
When the colonies were successful in new war efforts, lotteries were again used to fund necessary projects. The thought of imposing a tax on the citizens so soon after the rebellion against British taxation was not deemed to be feasible.
Many of our elite universities (e.g., Harvard, Yale, and Princeton) were substantially funded through lotteries at first. Other vital infrastructures such as roads, public buildings, libraries, and other worthy projects were funded through lotteries.
In the 19th Century, lotteries fell out of favor due in large part to corruption and moral fervor. In the 20th Century, a new source of revenue came into being: the war bond. Citizens were asked to make investments in bonds to support wars as early as 1812. Unlike a lottery, these had a guaranteed return. They also had the advantage of taking money out of circulation during wartimes when inflation could become rampant.
Of course, lotteries are increasingly used today by state governments. Excess levies are also used as a voluntary add-on to property taxes. Both of these are used as a voluntary form of taxation to support popular programs (e.g., schools, senior citizens, scholarships, botanical gardens, etc.)
Just imagine if we reversed the way we generated revenue. Imagine if Congress were funded by a form of voluntary tax. Might such a voluntary tax reflect the true will of the people, or could it become another approach to dividing our nation? In many communities, voluntary taxes have achieved wonderful results, and have not been divisive. Might that be the case at the federal level? Just imagine!!
* * *
“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.” – Adam Smith