By the way thanks for this conversation. I have thought about letting people allocate their tax dollars before and responding to you is helping clarify my thoughts.

Here are my thoughts:

LOCAL KNOWLEDGE

I need to purchase a new coat before winter. I know this because the zipper on my old coat is broken and it is too worn to make replacing the zipper worth the investment. I also know that I prefer brown leather vs some other choice and am willing to pay $300 or less. I am also willing to change my preference once I see what is available.

Knowing this level of detail allows me to effectively allocate my limited resources. This is what allows markets to reveal hidden preferences.

Political markets can never have this level of specificity. If I allocate resources towards police I may want better police training to avoid racial targeting. You may tighter crack down on drugs and someone else may want more traffic stops and checks for drunk driving.

FREE RIDER

I don’t think this truly addresses the free rider problem. A lot of people will assume that someone else will allocate money towards core functions of government, police, military, roads, etc and use their money to support a pet cause. This happens in the non-profit sector all the time. People support very expensive programs to give poor farmers cows or chickens leaving highly effective and inexpensive vaccination programs underfunded.

These choices are often made by very bright people with lots of money. It is simply more important for them to feel good about their choices. They can picture the farmer feeding her family by milking the cow.

WILD SWINGS

News stories right before tax allocation time could cause dramatic swings in funding choices.

SMV