Chad weighing in on “what are the government’s most harmful programs”. (See this link to the first post on this series and Insider’s list).

I basically believe that all government programs at the federal level outside defense (including border enforcement), foreign policy, interstate commerce regulation, and revenue collection are basically harmful. Specific programs that I think are more
harmful are:

1. The tax write off for mortgage interest. This entitlement is one of the main reasons the move to a flat tax is so hotly contested. An adjunct to this is the Progressive tax policy that the US utilizes. While the idea behind it sounds good, those who make more pay more, in practice it actually punishes success. A much better solution would be what I call a Split Tax. There would be a national sales tax of 8% plus a flat tax of 8%. The flat tax would kick in at the poverty level plus $5,000 dollars. The only deduction would be for home purchases, and then only the initial down payment or the money from the sale used to pay off the mortgage.

2. Social Security. Beyond the fact that it is going broke, it is also inefficient it the way it maximizes funds for the worker. It also is a poor social policy tool in that is discourages savings and will actually subject most workers who rely on it as their main source of retirement income to a poverty level existence. I have had several thoughts on what I think would be a better solution and currently I am thinking that the employer match continues as is, the employee contribution is directed towards an approved IRA or 401K program. This has the advantage of allowing the employee to maximize his retirement funds while still providing a “social safety net” for those who need it.

3. One where I think a lack of a coherent government program is costing us. Infrastructure maintenance. Lack of funding on the state and federal level is leading to deteriorating infrastructure (especially roadways) across the country. It also ends up costing the taxpayer money since deferred maintenance is always more expensive than maintenance performed when needed.

tags: taxes Economics farm support health care

This entry was posted on Thursday, April 27th, 2006 at 1:05 pm by Chad and is filed under I knew I'd use my Econ major, Your Tax Dollars In Action. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.