Screw Tax-Deferred Savings Accounts, Just Give Me Socialism

Have you ever noticed how often the ‘conservative’ (Republican) alternative to some socialist scheme inevitably involves the federal government allowing you to set up some sort of tax-deferred or pretax ‘account’ which you’re only allowed to use for the purpose that the socialist scheme was going to cover, and in particular for behavior the government approves of?

Many if not most conservatives are all in favor of these things, whether it be a health savings account or an account for dependent care or for your kid’s college, or tax deductions for this and that (which amounts to the same thing). And in the artificially-binary scenario where it’s either pretax-account or socialism, I suppose that’s understandable. On paper, they do sound like a market-ish alternative and seem to put the responsibility, accountability, and decisionmaking in the right place.

But allow me to seize the rare opportunity to criticize Republican ideas by saying that these sorts of ‘account’ ideas – all of them – suck.

Essentially, in one way or another all of these ‘accounts’ boil down to having money garnished from your paycheck and then being forced to beg for it back using paperwork and bureaucracy-navigation, by documenting that you used the money for the government-approved activity (and/or having an insanely complicated tax form). Yuppie SWPLs seemingly just love this sort of thing and I guess it’s no surprise why: it’s just like the homework forms and college applications they filled out so well as adolescents. Which means, they’re naturally good at it. Even better, (typically) the government-approved activity is finely calibrated to all the things they would have been doing anyway: taking lots of prescription drugs, sending their kids to college, buying a big house, etc. But these things boil down to an “I-have-a-life” tax. God forbid if you’re too busy to research the hoops the bureaucracy wants you to jump through, and then jump through them on command; you won’t get your money back, the second part of the scheme is a dead-letter, effectively meaning it was a scheme of just…garnishing money from your paycheck. Thanks ‘conservative’ Republicans!

Frankly, to people disadvantaged by any of this, a simple flat socialist program with minimal hoops (which, okay, that sort of begs the question) would be far preferable.

This also brings up how such things are also a tax on people who are not dumb but simply lack bureaucracy-navigation skills. SWPL yuppies cannot imagine such people exist or, if they can, that they merit any sympathy. But they’re out there. See Penelope Trunk for some refreshingly honest insights into what it’s like to be such a person, and see also myself (as I do seem to have a – thankfully far milder – case of whatever bureaucracy-retardedness syndrome she has).

The resulting environment is an example of (largely) Republican-pushed policies that – just as Republican critics charge, so I can’t quite say ‘ironically’ – will tend to increase inequality.

Let’s not kid ourselves here, who is more likely to be able to take advantage of a ’529 plan’, an upper-middle-class college graduate or a skilled worker with a HS diploma? Who is more likely to be able to research which employer-sponsored health insurance plan they should be on? Who is more likely to know how to take maximal advantage of mortgage-interest deductions and capital gains? Who is more likely to successfully navigate the panoply of dependent-care accounts, prescription-drug accounts, and on and on now available to all (but understandable only to some) thanks to the oh so benevolent generosity of our government allowing us to use our money as long as they like what we’re doing with it? And, not insignificantly, who is more likely to know how to (successfully) get away with/share tips on cheating on all these things, too? Well, is it the wealthy or the poor? The haves or the have-nots? The highly-intelligent or the simple? The many-degreed or the dropouts?

Elites already have advantages in life, of course, by definition. And conservatives, also by definition, are more or less ok with that. But the ‘savings-account’ type of political-economic policy approach only exacerbates this baseline advantage, magnifies it out of proportion. Who loves this sort of thing? Elites – folks who instinctively know they’ll successfully navigate it all.

Screw your tax-deferred accounts and tax credits/deductions and your busybody social-engineering projects, Republicans. Fuck ‘em. Just pay me with fucking money. Sure, go ahead and income-tax it, but let me use the rest as/when I fucking see fit. I shouldn’t ever have to park it somewhere and then beg some bizarre bureaucracy merely in order to get my own fucking money back. I shouldn’t ever have to calibrate my activities to those the government approves of to minimize my tax outcome. Among other things, government should not even be endlessly setting up lists of approved activities in the first place. These ideas are not ‘conservative’ and they are not good for society. I’d rather just take my socialism straight.

5 Responses to Screw Tax-Deferred Savings Accounts, Just Give Me Socialism

  1. Jehu says:

    Yes, I’d prefer that we just jack up the personal exemptions and torch all of the myriad spending accounts. Frankly I’d prefer to see IRAs and all of those other sorts of structures burned as well, in favor of simply jacking up the personal exemption.

    But that gives far less power for social engineering or aggrandizing the Second Sigma. So it’ll never happen.

    • Hey whaddya know, it was precisely you I was thinking of when writing this post! :-)

  2. Jehu says:

    Yeah, I’m really negative on the Second Sigma—does it show? IMO, their moral responsibility is to construct systems that are simple to navigate, or at least not to act as if they detest their lessers. Draining people’s organizational capacity and initiative to jump through a bunch of hoops is a particularly cruel form of social control.

  3. Jehu says:

    Ah, turns out I’ve written some thoughts on this
    http://chariotofreaction.blogspot.com/2011/10/tyranny-of-glib-scourge-of-second-sigma.html

  4. asdf says:

    1000x yes. This annoys the shit out of me.

    The main problem is political. If you led a campaign against, say mortgage interest deduction or employer health insurance exemption, it would likely not be accompanied by an increase in the general deduction. Instead it would just be a tax hike on the middle class with nothing in return. That’s the likely outcome anyway.

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