Much has been made of the growing influence of small donors
in the 2008 presidential race. These donations have increased
significantly, especially among the Democratic Party frontrunners, who received
over half of their total contributions for the months of March, April, and May
2008 in contributions of less than $200 dollars. However, such donors are
responsible for only slightly more than a third of all donations in the
presidential race from January 2007 to March 2008, up from just over a quarter
in 2003-2004. While this is significant, similar growth has not been seen
in other races; however, there are creative policies that can help fuel an
increase there as well.
Two basic types of donor incentives are currently being used in states -
tax credits and refunds. In states with tax credits, voters are allowed a
credit against personal income taxes for a certain amount of campaign
contributions. States have a diversity of rules regarding which
contributions qualify for the incentives, both the amount and the recipients
(i.e., PACs, political parties, candidates) are regulated.
Minnesota has a unique program
that allows taxpayers to receive a $50 refund for contributions made to
political parties or candidates. As a result of this law, small donations
increased from 34% to 39.2% of total donations between 1990 and 1998, a small
but significant improvement. Recently, some have advocated for a system of
campaign finance vouchers that would allow any citizen to spend a small amount
on political contributions without having to take the money out of pocket and
wait to receive a reimbursement at tax time.
These small donor programs offer an alternative method of public financing that
would go a long way to democratizing campaign finance and reducing the power of
wealthy contributors.
US PIRG Education Fund - Toward
a Small Donor Democracy
Minnesota
Small Donor Tax Refund Law
