What, religious data? Are you serious? That's one of the most critical things they can track about their citizens.

Let's say your town has a lot of pig farmers. The pig farmers are afraid their business is diminishing. So they lobby the local government to put a tax on chicken and beef, to encourage more pork consumption. Which local officials might be inclined to do for economic reasons. But then you collect religious data, and it turns out 50% of the population is Jewish, Muslim, and Hindu. So half the population now has to pay a tax, which is effectively a tax on their religion, because their religious belief says they can't eat pork.

This is a made up example, but the point is that you need to know about your citizens so you can make just laws that respect those citizens (and encourage businesses, job training, etc based on demographics). It's why we have a census.

Say you get your way, and, for fear of Mark Carney rolling the tanks in and taking over North America, the US stops collecting any data on its citizens. How is the IRS supposed to know how much tax to expect from you? How is SNAP supposed to determine your eligibility? How is unemployment supposed to know if you're ripping them off or not? Data privacy is a real concern, but you need PII to run government services effectively. Running a state without collecting PII is like running a hospital without collecting any.