Junior Ganymede
We endeavor to give satisfaction

Family-friendly tax policy

December 22nd, 2009 by Vader

A calculation of what the tax break for children should be.  

To correct for this inadequate treatment of households with ­children, the existing dependent exemption for children, the child credit, the ­child-care credit, and the adoption credit should be replaced with one new $4,000 credit per child that can be used to offset both income and payroll taxes. (This amount is set much closer to the $3,250 figure than the $8,500 one mostly to reduce the plan’s negative impact on federal revenue.)

The new child credit would accomplish several significant policy goals. First, it would offset the anti-parenting bias created by Social Security and Medicare. Second, the credit would help simplify the tax code by getting rid of other exemptions and credits that apply to ­children. Third, and very important for many families, it would end the bias against families with a stay-at-home parent now caused by the child-care credit (which applies only if both parents are working for pay). And finally, it would reduce effective marginal tax rates for many middle-class families.

Such an approach would also be very popular with a vital political constituency — middle-class parents — thereby opening the way to further tax reforms that would both help to pay for the new credit and correct other important deficiencies in the tax code. It could stand as the centerpiece of a new tax-cutting agenda.

Observations:

1. I’ts a great idea.

2. It’ll never be passed into law.

Comments (2)
Filed under: Deseret Review | Tags: ,
December 22nd, 2009 14:37:37
2 comments

John Mansfield
December 22, 2009

I get tired of conservatives whining about how tax law ill treats families. They never mention the huge advantage it is to one-income families, such as mine, that we can file jointly instead of separately.

Here’s the opening paragraph from my old post, “The ‘Procreative Mormons Suck the Nation Dry’ Tax Credit“:

“You can earn $100,000 and pay no federal income tax. You say ‘John, how can I earn $100,000 and pay no federal income tax?’ First, earn $100,000. Now, you say, ‘John, what do I say to the tax man when he comes to my door and says, “You have never paid taxes”?’ Four simple words, although not so simply said: ‘I have eight children!'”


Vader
December 22, 2009

Eight simple ways to lower your taxes?

Leave a Reply