Junior Ganymede
We endeavor to give satisfaction

An Admission Against Interest on Child Tax Credits

June 18th, 2012 by G.

The US child tax credit should be raised to $5000 immediately. If it isn’t refundable, it should at least apply to payroll taxes. Children benefit the society as a whole, and are costly these days.

That said, I don’t believe the cost per child birth to age 18 is anything like the $235,000 figure reported by the Department of Agriculture. The implied yearly number per child is $13,000, which is absurd. The figures might be a little more believable if you include lost income from mothers who don’t work or work part-time, but the figures don’t include that.

I also realize that costs may be greater in other parts of the country, but frankly if you’re living somewhere where a kid costs enough per year to bring the average up to 13k, move.

What would be interesting, though, is to compare the cost figures by region with the family sizes per region? I bet there is a correlation, which either tells you that parents have a ‘family budget’ and they keep having kids until its exhausted, or it tells you that people who want kids move to where they can have them without selling the firstborn.

Comments (5)
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No Tag
June 18th, 2012 15:54:13
5 comments

Michael
June 18, 2012

I don’t do daycare, but I know plenty of my peers who put their kids in daycare, and let me tell you, it’s expensive. I don’t have a hard time buying the $13,000 figure.


Bookslinger
June 18, 2012

The $13,000/year/child figure seems inflated, as if it is amortized over 1 child per family, not taking into account handing down items such as strollers, infant/toddler car seats, toys, and a modicum of clothing. Doing so allows those with larger families to have a lower net cost-per-child. Buy the stroller/car-seats/etc at a 2nd hand store, amortize over the avg number of children in an LDS family, and come out even lower.


Foxfier
June 18, 2012

Argh, I hate digging….
http://www.cnpp.usda.gov/Publications/CRC/CRC2011.pdf
Here’s claims from the original report:

Child-rearing expenses vary considerably by household income level. For a child in a twochild, husband-wife family, annual expenses ranged from $8,760 to $9,970, on average,
(depending on age of the child) for households with before-tax income less than $59,410,
from $12,290 to $14,320 for households with before-tax income between $59,410 and
$102,870, and from $20,420 to $24,510 for households with before-tax income more than
$102,870.
As a proportion of total child-rearing expenses, housing accounted for the largest share
across income groups, comprising 30 to 32 percent of total expenses on a child in a twochild, husband-wife family. For families in the middle-income group, child care/education
(for those with the expense) and food were the next largest average expenditures on a child,
accounting for 18 and 16 percent of child-rearing expenses, respectively.
Annual expenditures on children generally increased with age of the child. This fact was the
same for both husband-wife and single-parent families.
Overall annual child-rearing expenses were highest for husband-wife families in the urban
Northeast, followed by families in the urban West and urban Midwest; families in the urban
South and rural areas had the lowest child-rearing expenses.
Compared with expenditures on each child in a two-child, husband-wife family, expenditures
by husband-wife households with one child average 25 percent more on the single child and
expenditures by households with three or more children average 22 percent less
on each child.
Child-rearing expense patterns of single-parent households with a before-tax income less
than $59,410 were 7 percent lower than those of husband-wife households in the same
income group. Most single-parent households were in this income group (compared with
about one-third of husband-wife families).


Foxfier
June 18, 2012

I was going to guess they were inflating the number by counting full-price child care costs for “supplemented” parents; not sure if that would be correct or not, since I can’t think of how many single mothers have the same income as a double income marriage….


Foxfier
June 18, 2012

Incidentally, I very much like the idea of increasing the child credit and making it apply only to taxes– no refund on taxes not paid. Wouldn’t change much in our household, but eh.

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