Audio Clips

07 March 2011

Because It's Not Actually Your Money

Gregory Rodriguez of the LA Times has written an op-ed stating that health insurance plans, retirement plans and mortgage tax deductions are welfare programs wherein the US government subsidizes your income. Only a full-fledged, dogmatically-pure worshipper of the state would call it welfare when you're allowed to keep more of your own money.

Here is the operable paragraph:
Three programs make up most of this "hidden welfare state," as another scholar calls it. The first is employer-based health insurance, which is subsidized by the ability of businesses to deduct some of the costs from their taxes. The second is the home mortgage interest deduction for individuals, and the third is the creation of tax-free retirement accounts, into which employers and employees can contribute. Yale political scientist Jacob Hacker calculates that such "tax-advantaged" programs make up almost a third of America's social welfare spending.
I do agree in the sense that the government is busy picking winner (homeowners) and losers (renters), but that's just one more reason to adopt the Fair Tax.


Nathan said...

One time in college, I was talking to a friend from Norway about taxes. She admitted that the tax rate in Norway was really high (I believe it's over 50%). "But," she said, "the nice thing is that in the summer, the government gives everyone [about] $2000 to go on vacation. It's a really fun time of year, because everyone is on holiday."

Yes, the phrase that bothered me most was "the government gives everyone." I asked her, "Wouldn't if be better if the government just let you keep that money to begin with?" I pointed out that (1) it would save on the administrative costs of collecting then returning the money, and (2) families would be able to collect interest on the money as they saved it, instead of the government collecting it.

She nodded slowly, and it really seemed as though that had never occurred to her. "But," she said, "some families wouldn't save it. They don't have the discipline to. So it's better this way, because everyone gets to take a vacation."

I was blown away. There are entire nations of people that think this way.

Joshua Richardson said...

Yes, I've met people like that. Government-created dependence is insidious. It stifles creativity and drive. It's the same as feeding wild animals. Eventually they lose the skills to hunt. It is so completely foreign to how my mind works that I just look at people like that and think, "You poor, poor person. How do you survive?"