Just look at all these tax-deferred savings plans (401k's e.g.). I can almost understand collecting taxes when funds are withdrawn early, but what's the penalty for ?? A PENALTY for using my own money ??
Of course, if you have a good enough reason (in the judgment of the government) for using your own money, our benevolent government can waive the penalty.
And, don't forget, the government establishes the timeframe you can use YOUR money without penalty by establishing the earliest and latest ages you can take distribution.
Again, this is insane.