Why? Condoms are cheap, having a baby is a choice. I know we’re pretty awful in this country about encouraging fiscal responsibility, but still, oughtn’t we encourage people to wait until they can afford it before having kids?
Tourbot:
I don’t know. Do you really tink it’s a direct parallel? If so, please explain to me how, 'cos I don’t get how mortgages have to do with children.
Collounsbury:
So we need to increase the population? There’s a problem there.
It’s not my confidence in my investing abilities, Coll, it’s the fact that I’m not in debt, that I save money, that I’m not obsessed with consumption. It’s faith in my investor, faith in 100+ year market trends, and faith in caring about my future.
That would be DKw, just 3 posts above yours.
And yes, we look to the future for long-term planning. No duh.
But what is more important, quantity or quality? We do not need to continually increase the population in order to maintain our economy.
And we do NOT need to encourage people to have children if they cannot afford to.
Not necessarily. Size is not relevant if aggregate productivity is increased.
Yes, I said that. Again, I’m all for education.
Coll, so you’re saying that the childless pay more so we can increase the tax base, even though the perks given to parents might well encourage people to have children when they cannot afford to do so. I guess I don’t see the benefits to the childfree at all. Yes, pay for infrastructure; yes, pay for education; yes, pay for social services . . . but make parents pay as well.
Why not simply tell parents that if they cannot afford to support their kids without tax breaks, they shouldn’t have them?
Because, as I think she clearly explained, it is an analogous situation, i.e. certain fiscal advantages are given to mortgage holders which are analogous to those given to supporters of dependents. Behind each set of fiscal advantages are some social policy goals.
You need to read more closely. I did not say increase population. I rather indicated that whether population going forward increases or decreases, future work force has to be able to create
Ahhh, market trends… How to start?
Andros, the market is not a force of nature nor something in which past trends cut into stone future occurances. Behind continued growth are a number of factors, among them future productivity. Without future productivity, and one may add an appropriately large active population, such trends will not hold. This is not magic.
So, once again, your ability to cash in on present savings and investements in part depends on future economic conditions which in part depends on the state of the active, working population upon retirement. As such, although you do not realize this, your future comfort depends both directly and indirectly on today’s and future children being both numerous enough and productive enough to
But what is more important, quantity or quality? We do not need to continually increase the population in order to maintain our economy.
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Straw man my dear, straw man. I did not say population must ** grow** --that’s your a priori assumption-- but that the magnitude of the change, whether increase or decrease is of some concern. Too rapid a change in either direction and one will see real costs imposed – above all if productivity growth does not match the magnitude of the change.
Another straw man as I do not see fiscal advantages encouraging people to have children they can not afford. In fact I believe empirically speaking one finds little strong response to pro-natality policies when the previaling trend is towards decreased natality, i.e. governmental fiscal policies are largely not capable of increasing birth rates.
However, they do seem to be useful (although I suspect there are inefficiencies, but in the context of the possible…)in making more resources available to those children who are born. As such, and given the assumption that more investment in children in terms of education and largely positive economic environment helps long-run productivity --I do believe this is supportable-- then there are long-run gains even for the non-child-bearing insofar as overall wealth is increased.
As such, I have to consider your objections fairly blinkered.
Quite the contrary, size is very relevant. Your error here is reading this as meaning there must be population growth, which is clearly not what I stated. Rather, I am focused on the magnitude of change. Barring historically unprecedented growth one must remain concerned with the size of the population in the future. Some percentage change in either direction is not problematic. An apparent demographic collapse as might be discerned (perhaps) in Japan and many European nations would be of some moderate, perhaps even great concern depending on the ability to import labor to stem the problem.
As I think expressed in my original intervention, both factors need to be considered, unless you wish to depend on fantastical productivity growth. Your evident hostility to children aside, future workers are important in the equation.
So, whether we want higher population or not, directing social supports to children in order to create future higher productivity is a positive. You can not assume this will happen without social investments in the required infrastructure and in the context of the USA, assistance in the self-funded aspect of this.
False dilemma as I stated above, there is no evidence to suggest governmental fiscal incentives, even large ones used in Europe, are capable of creating higher natality. If you need to verify this, look up data on the results of French and German pro-natality policies, which have failed to stem the decline in ‘native births’ – immigrants with culturally determined higher birth rates presently are tending to prop up the aggregate birht rates.
Parents do pay insofar as they are also taxpayers, and of course shoulder individually the greater part of the burden of producing the future active workforce which is necessary for your comfortable future. I might even decide to make a case that the non-child-bearing are externalizing the cost of their future non-productive life stage, retirement or what have you-- unto the child-bearing. In which case you should in fact pay more. In any case, the social policy is to direct, perhaps somewhat inefficiently but the USA seems largely adverse to direct payments, some extra resources towards children.
False dilemma. You are presuming a priori that parents are having children for tax breaks. Given the cost of children and the body of data, I feel comfortable in stating this is a fallacious assumption. The question is rather the resources devoted to the same as argued above. In short, this is a typical example of an instance where individually rational desires end up at odds with collectively optimal and rational decisions.
This strikes me as a pretty bold assumption. Maybe there is a social goal, maybe this is a good way to chase that goal, but it’s also possible this a convenient way of paying off an influential political group.
If as you (rightly IMHO) say the policy is not really designed to encourage more kiddy-giblets, surely there is a better (ie cheaper, more direct and less regressive) way to encourage quality-enhancement of these children – by using the otherwise foregone revenue for targetted subsidies for child-care, education or health.
My guess is that it’s a judgement about what the government thinks people think is a fair evaluation of capacity to pay income taxes, conditioned by history and political inertia.
Let me point out that, even in purely financial terms, having children costs the parents one hell of a lot more money than it does to the single taxpayers across the street. I can’t find a link, but I’ve read that the total cost of raising a child to the age of 18, including food, shelter, and clothing, is on the order of a half a million dollars. The “imbalance” in tax burden isn’t nearly high enough to account for that, and we haven’t even gotten into the intangibles. I never regret having children, but I have little sympathy for anyone complaining about a little tax deduction.
And yet they’re the adults and taxpayers of tomorrow, who will be paying the childless oldtimers’ Social Security, among other things, as well as being all the intangible things that make up a community.
Oh, btw, the mortgage interest deduction, AFAIK, was a postwar creation to help give a boost to the construction industry, and provide employment and opportunity to the returning soldiers who had put their lives on hold. If anyone would like to argue that it’s outlived its usefulness, go ahead, but don’t expect to get very far - too many people have too much of their financial situations dependent upon it. Different thread anyway.
There are clearly people who have children they can’t afford, but do you really think those people would not have had children without the $500 tax credit? It’s just not enough to make a rational person decide they can afford a child with the credit, but not without it.
Homeowners who are paying mortgages get to deduct whatever portion of their mortgage payment goes to interest ( with certain exceptions). Renters do not get to deduct any part of their rent payments.Therefore, if you and I are in the same tax situation, except that you rent and I pay a mortgage, you will pay more taxes than I will. In fact, the mortgage interest deduction makes even less sense in some ways than the child credit.Even you, andros , have to admit each person in a family will raise that family’s necessary expenses to some degree,whether you feel it should be partially defrayed by a tax credit or not.On the other hand, a mortgage may not add any expense (my mortgage payment may be exactly the same as your rent payment) or even be less expensive (in real life, I couldn’t rent a studio apartment for my mortgage payment),but the interest is still deductible.
And andros, unless the Social Security system is greatly changed, the childless will benefit from others having children.I am not saying that we need to encourage population growth. However, my grandfather died at age 89 after collecting SS for nearly 30 years. He collected far,far more than he ever contributed. He also bore the expense of raising three children who were contributing to SS during the years he was collecting it.They were paying in more each month than he was collecting. His childless contemporaries didn’t have the expense of raising future contibutors, except for whatever adjustments were made by the tax code, but they got the same benefits.
True, fairly strong assumption although I am not making without background support. I think if one reviewed the record (I am for a variety of reasons more versed with European examples) one will find the typical mix of rational policy goals and pay-offs. Not necessarily contradictory. E.g. the mortgage deduction where we see rational policy analysis mixed in with rewards to pressure groups etc.
True, very true. That’s why I raised the efficiency issue. However, I think we can agree that tax policy tends to be used as social policy light in the USA, for better or worse.
I wouldn’t disagree, on the other hand I do not see this as exclusive of the rational analysis I presented above.
Certainly no matter what the political subject we look at we’r going to see a dirty mix of justifications, however all that being said, I think we see enough rational justification to explain why andros’ complaint is largely without foundation.
Excuse me, Collouns, but have you ever lived in Montreal? I ask because you used the word “subventions”, which I understood to be a feature of Montreal English (what the rest of the anglo world would call “subsidies”), from the French subvention. I ask because it’s a feature of my idiolect as well, and it would be cool to find out if it exists in other English lects.
Elvis cited afigure of half a million as the cost of raising a child today. I’ve heard figures as high as one million dollars. On top of that, the cost of a college education is rising faster than inflation. So I doubt that the comparitively small child tax credits are going to have much impact on the number of people choosing to have kids. It’s true that children are an enormous financial burden, that’s all the more reason why those considering parenthood should think carefully, and not be told to simply trust the government to carry them through. Despite the nonstop promises of politicians to “help our families” with tax cuts, credits, and other brilliant ideas, the government actually can’t do much compared to the overall cost of raising a child.
Now for one last thought on the ‘today’s children will pay your social security taxes’ issue. Right now, I’m 18. I assume that my retirement is more than 50 years away. Nobody knows what sort of political and economic changes will hit our society during that time. We might come to our senses and abolish social security; I certainly hope so. I sincerely doubt that there is any danger of long-term economic downturn as a result of a labor shortage as a result of not having enough kids now because as I said, the number of children isn’t going to vary all that much just because of tax policy.
Busted. Been about 20 years now but when I was a kind I lived in Westmount area around Argyle. Can’t quite remember my address back then, it’s been a long time but I guess some things still crop up. Of course I also work with Swiss so wierd things creep into my vocabulary. Donc ou est-ce que tu magasines actuellement? Moi, il me semble que La Baie a etais mon place prefere, but its so long since I’ve been back. Pity, always liked it there.
ITR:
Are you smoking the cheap crack? Abolish social security? Why? It’s a useful social tool for reducing poverty among the elderly – one simply has to consult the change since its institution – plus, and I believe this has been pointed out multiple times, social security is not solely or even perhaps primarily a retirement fund – It is a social insurance fund for those who by age or other reasons can no longer work to insure a minimal standard of living.
Now, in re the issue of labor shortages or what not: I’m not sure how many times I have pointed out that this is a red herring. I hope you will reread my comments.
That statement does not entirely hold true. Before I started my own business, where I am able to split income with my wife who chooses to stay at home for the benefit of our children as well as her poor health, a good portion of the family income was taxed at the higher bracket. My family paid at least $2500.00 annually more in taxes than DINK families of the same total income.
As a result of working away from home one year, I claimed separation and paid “alimony and child support”, and even had a separation agreement made up to comply with the letter of the tax code. That effectively split the wage income and saved our family over $3,000. The following year, the tax guide introduced the requirement of marriage breakdown effectively blocking that loophole. Now I am speaking about the Canadian tax code, but I am fairly certain that the same disparity exists in the States.
But like you I really get pissed off with child care subsidies. I have no objection to support for low income families, but this subsidy totally ignores the great financial sacrifice and contribution of spouses who stay at home, looking after their children full time, and more often than not participating as volunteers in various community organizations.
<<On top of that, the cost of a college education is rising faster than inflation. So I doubt that the comparitively small child tax credits are going to have much impact on the number of people choosing to have kids.>>
This statement is made under the assumption that the parents will actually be burdened by the cost of their child’s college education, which in many cases is not true. The finicial aid office at UNH claims that between 75-85% (varying by year) of students are receiving some ammount of finical aid. The majority of the aid is in the form of student loans, which are paid back by the grad, not their parents. That’s why I graduated in 99’ over $25,000 in debt. Or maybe it’s because UNH was just declared the most expensive (public) state university in the country. We’re #1!! In any case, most of the kids I went to school with, except a fortunate few, are paying for their schooling themselves through jobs held while taking classes, and all the loans we’re repaying since graduation. Ironically, even though my parents didn’t contribute more than 1,500 towards my cost of education, they were able to get a tax-credit for having a child in college. Since I wasn't earning enough to to have to pay taxes at that point, I’m glad someone in my family could take advantage of it.
You guys are going down the path of folly if you’re trying to come up with logical, rational reasons for many of these policies.
Here’s the real reason: Because there are a lot of voters who have children. Period. Someone made a promise of bread and circuses in order to buy those votes. No one was willing to oppose it for fear of angering a large constituency. It therefore became law. Whatever justification for it could just as likely have been complete crap as anything logical.
You can point to just about any part of the tax code or Federal Register and see the same thing. Laws aren’t passed because they are the best alternative - they are passed because it was politically expedient to pass them.
Some times this creates gross distortions. Like, if a President needs the vote of a representative in a swing state, he may agree to support something that is totally unnecessary or even detrimental to the country, and benefits a very small minority who just happen to be important to the politician in question. Thus you get nonsense like the National Wool and Mohair Subsidy, which is still being paid 50 years after it was militarily important, or the national Helium Reserve, which still receives millions of dollars per year decades after the last military blimp flew.
Then there is the Rural Electrification Administration, which was enacted to bring electrical power to farms and small communities at a time when only about 5% of them had it. Now about 99% of all farms and small communities have electrical power, so the REA is finished and was folded, right? Wrong. It became too important politically, and now enjoys a bigger budget than its ever had.
Then you’ve got the buyoffs to unions and trades, which are actually detrimental to society as a whole. Do you know why it costs $200,000 to build a house, when a car which is much more complex can be bought for 1/10 of that? Because houses are still build roughly the way they were 100 years ago. And why? Because the various building codes and regulations make it almost impossible for real innovation to take place in home manufacturing. I remember a pilot study of modular houses that was done about 15 years ago, using factory-made panels that had all the wiring, insulation, heat ducts and plumbing molded right inside them. No plumbers or electricians required. Snap four panels together, put down a floor and a pre-fab roof, and you have low-cost housing that is completely plumbed and wired. And the manufacturing process produced surprisingly nice houses - they didn’t even look pre-fab. In fact, the molded pre-fab nature allowed compound curves and things that are expensive to do by hand, bringing a new level of architectural choice to low-income homeowners.
Anyway, the project died because of pressure from unions, and because a one-size-fits all construction method could not match the vast and confusing nationwide set of building codes (one example - one city requires that all plumbing be threaded or soldered. Why? The people who studied the code could find only one reason - to employ more plumbers. Press-fit joints have been around for a long time now, and work just fine. And the modular home happened to have them. But if all your joints require a screw-fitting, then you need a human to do it manually.
So before you get too worked up about the child benefit, you might want to think about all the other ways in which powerful minorities and majorities make YOU pay for their benefits.
Not at all, one is only going down the wrong path if one assumes such are the sole reasons (and sometimes even the primary reasons) for something being enacted.
Further, in truth my entire argumentation was not to argue that the whole panalopy of tax law, advantages etc. etc. derive from rational efforts, but rather that the specific complaint was not supportable since one could justify subventions to child rearing tax payers on good economic and rational grounds, albeit one could critique the particular method as not terribly efficient.
But further, I have an issue with an item or two.
trivial item but it occured to me while editing, is this in real dollars or normal dollars.
Now on house building you have some excellent points it appears, although lacking other information I reserve some judgement, except in re:
In re lack of nationwide set of standards we run into two problems:
(a) the federal system of government and the 'state’s rights" so near and dear (recently) to many
(b) actual (factually and rationally sustainable) differences in needs by region in terms of code.
But the point is very well taken. However, I am afraid one has to live with the system’s inefficiencies.
I’m not arguing for a uniform building code standard - clearly that would be silly, because the needs of one region are not necessarily the needs of another. No one should have to build a home in Montana with the same earthquake protection as, say, a home in San Francisco.
Rather, my point was that building codes are often a good example of how government regulation exists not because of its intrinsic goodness and rational need, but rather simply because someone important had the ear of someone else important, or because a politician in political trouble needed to buy a constituency with favors.
A trivial example: Speed limits are often the result of the political clout of people who live near various roads. Thus, you’ll have roads in rich neighborhoods that have more capacity and better safeguards against accidents as roads in poorer areas, yet the speed limit on them will be lower because the people who live near those roads don’t like the noise of high-speed traffic and have the political power to do something about it. Sometimes arcane engineering discussions of traffic flow and the rationale behind various speed limits miss the larger picture, that speed limits often have nothing to do with good engineering.
This is not an argument for a national speed limit, but simply an observation that democracy isn’t perfect. Perhaps it’s an argument for a more laissez-faire world in which the tyranny of the majority and the tyranny of special interests have less political power. It might even be an argument for various political reforms that might reduce the power of people with money and influence.
If I am, then I’m not the only one. I think there is some sentiment for getting rid of Social Security and it’s growing. Of course you’re right that it serves as a safety net for the elderly when they can’t work any more, but that doesn’t mean that everybody should be forced to contribute if they feel that they can plan for themselves. We can devise a better system that doesn’t include eating up a ridiculous portion of the federal budget. We’ve had threads about this before. Maybe we can have another one later. For now, let’s drop the subject.
The $500? child tax credit is not particularly good public policy. You get if for having a child, not for spending money on a child. If you give a parent extra disposable income, some of it will be enjoyed by the kid. But it’s not clear that the bulk of it will go into the kid’s education, medical care or factors that serve to increase his or her future productivity.
One of the principles of good tax/subsidy policy is that the intervention should be narrowly targetted. So if you want to subsidize education, it’s better to… subsidize education directly. Analagously, a large share of the resources transfered due to minimum wage restrictions end up benefiting the non-poor. For this reason, many liberal-leaning economists prefer interventions such as the earned income tax credit over minimum wage laws. Jeez, I hope that wasn’t a hijack, I meant it as an analogy.
I’ll leave US home subsidies for another thread; let me note though that as currently structured they are a pretty regressive subsidy IIRC.
There are lots of votes in supporting families, therefore each party wants to be shown doing something for them.
The amount of money you get is tiny compared to the real cost of raising a child BUT i suppose it does help the poor.
I think its a targetting method, the ‘appears simple’ way of saying ‘everyone who earns less than x’ will get some money is actually hard to work and removes the incentive of the middle classes to support the welfare system.
or is that too boring an answer ?