Bigger Government – Lower Investment Returns?

At an August 12^th, 1986 news conference then President Ronald Reagan gave a speech on the perils of big government. He stated, the following, “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help”. Here is a brief cut from that speech.https://www.reaganfoundation.org/media/128649/newsconference2.mp4

Before we get into this week’s topic, “Bigger government, worsening outcomes usually for your investments”, click on both the Subscribe button and notification bell below so you will be alerted when we upload new Oak Harvest content.  Or even better give us a call at 877-896-0040 to set up an initial meeting with one of our retirement planning specialists.

A New Software

Frequent viewers know our investment teams general thoughts on big government spending programs or regulatory intervention on your investments.  We’ve previously discussed that when it comes to your investments we are most often on the side of Ronald Reagan.  When big Government and politics meet, things tend to become very inefficient.  Layers upon layers of bureaucracy and friction are usually introduced to otherwise smoothly functioning markets. Quite often, when big government steps to an industry to solve a problem, complexity or costs rise so high that instead of helping a situation, more often harm is caused instead due to lack of accountability or budgeting or both.

Last week, major news outlets released a story on how the current White House administration is looking to use some of the $80 billion appropriated for an IRS upgrade under the Inflation Reduction Act to create a government run Tax-preparation option. To create an alternative to the software and services run by Intuit, H&R Block, Jackson Hewitt, TaxSlayer and others.

Proponents of the government idea argue that these privately run and owned tax preparation companies are charging “middle-income” Americans for what they think should be a “free” public service.  Many liberal leaning former government officials like have been quoted saying things like “It’s problematic that we instead provide it through these private corporations that prey on people and extract profits from taxpayers that are just fulfilling that civic duty.”

Dangerous Thinking

Viewers, this is absurd and dangerous thinking. An efficient and timely system already exists with checks and balances. Current tax prep companies have already invested hundreds of millions of dollars in research and technology over decades to build electronic filing systems. Many programs already exist that are already free to use for basic Federal returns most often, with a fee charged for state tax preparation work. Taxpayers with incomes under $73,000 can use the IRS Free File program, which provides access to free private software. TurboTax and H&R Block no longer offer services through Free File, but companies such as TaxAct and TaxSlayer do.

Proponents of the government idea argue that these privately run and owned tax preparation companies are charging “middle-income” Americans for what they think should be a “free” public service.  Many liberal leaning former government officials like have been quoted saying things like “It’s problematic that we instead provide it through these private corporations that prey on people and extract profits from taxpayers that are just fulfilling that civic duty.”

Investors, a direct-to-IRS e-file system will be redundant with current systems and costly to develop.  For sure it will not be free to build, free to operate and maintain, and free for taxpayers.  You will be paying those thousands of federal government employees’ salaries and benefits 7 days a week, 365 days a year forever. Whether its tax season or not.

Investors and taxpayers should worry about a system where our federal government “helps” you with your taxes.  Where government IRS employees give you advice to complete your forms and then government IRS employees audit them.  Checks and balances? Nope, not with that system. Duplicate costs? Yes.

While the current IRS filing system is far from perfect, socializing functioning private run processes and industries has almost never improved efficiencies and reduced costs.

Viewers, when representatives or politicians show up on TV and you hear “I’m from the government and I’m here to help”, more often then not, its best to run the other way with your money and time.  Their goals are generally not aligned with your financial goals as they are not held accountable for their projects investment returns.

We Can Help

Viewers, there is no perfect investment philosophy, there is no perfect trading tool, that is all weather, outperforming every stock cycle or in every economic environment.

At Oak Harvest, we have many tools that our advisors use to help our clients meet their retirement goals and objectives. These tools are both market based and insurance based, that we can use to meet your retirement goals. The future and stock markets are always uncertain and that is why our retirement planning teams plan for your retirement needs first, and your greed’s second.

Give us a call to speak to an advisor and let us help you craft a financial plan that helps you meet your retirement goals. Call us here at 877-896-0040 and schedule an advisor consultation. We are here to help you on your financial journey into and through your retirement years.