High taxes discourage childbirth

Now there's a contraception method I bet you never considered.

But Washington Post columnist Robert Samuelson says that if taxes are raised to help keep the federal deficit from increasing, then policymakers need to be careful to structure any hikes so that they are more parent-friendly.

If they don't, says Samuelson, "more Americans may choose not to have children or to have fewer children. Down that path lies economic decline."

Samuelson's core argument in his "America's Parent Trap" column today is that the United States' current fiscal and tax policies "punish parents, who are taxed heavily to support the elderly. Meanwhile, tax breaks for children are modest."

Yes, Social Security and Medicare taxes do account for a substantial bite of every worker's paycheck.

But I must confess that as a childless taxpayer, I'm a bit perturbed each April 15 when my prolifically reproductive neighbors get extra personal exemptions and a $1,000-per-child tax credit.

I know, I know, a few thousand less to the IRS at tax-filing time doesn't cover the costs parents incur in raising their kids the rest of the year. 

However, I honestly doubt that those expenses or potential tax breaks played a large (or any) part in any person's decisions to procreate or not. I know they weren't the major factor when the hubby and I decided to keep our family count at just two.

Samuelson, however, swears budget and tax policy are tied to family size. And if Americans don't keep adding to our population via more kids in more families, then our country is doomed.

OK, doomed is my word, but Samuelson says essentially as much:

"Societies that cannot replace their populations discourage investment and innovation. They have stagnant or shrinking markets for goods and services. With older populations, they resist change. For a country to stabilize its population -- discounting immigration -- women must have an average of about two children."

He further argues that the United States needs "to avoid Western Europe's mix of high taxes, low birth rates and feeble economic growth. Young Americans already face a bleak labor market that cannot instill confidence about having children. Piling on higher taxes won't help."

First off, I'm not going to apologize for not being a Fertile Myrtle. The hubby and I as only a pair contribute in many other ways to the betterment of our neighborhood, city, state and, yes, the United States' economy.

And I think Samuelson's argument is a bit simplistic. To be fair, he concedes there are many non-tax reason why people decide to have or not have kids.

But in his economic argument he neglects, for example, the potential for greater productivity per person. Isn't that what U.S. companies point to now as they resist hiring workers, leading to the bleak labor market Samuelson cites?

The bottom line is that there are a lot of factors involved in what makes for a vibrant economy, as well as what encourages the growth of families within that economy.

I know it's an election year and that tax cuts we've enjoyed for almost a decade are on the verge of expiring, but as we and members of Congress face the difficult decisions that must be made in the next few months, let's not lapse into demonizing some parts of society or canonizing others in the name of taxes.

Related posts:

• Tax cuts or total tax reform?
• 'Uncle' Alan Greenspan's latest on taxes
• Bush tax cuts to get Senate hearing
• Is it time for tax reform?
• Federal tax law changes (PowerPoint)
• Children's ages, rebates and credits
• Kids, money and economic chaos
• Obama's fiscal 2011 tax proposals

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Comments

[Sonja]

I don't know of a single person who took taxes into consideration when deciding whether or not to have a child. Adding additional children to our society to spur on economic growth seems like a ridiculous reason to me to have children. Have them because you'd love to have children - not because you're worried our society's consumption will go down. Heck, in the long term I think our planet would be well served if our consumption did go down.

[Kay]

I think you're onto something. The zero-population growth people must be glad there was no major power outage (so far!) this summer!

[Dawn]

For years I was a childless tax payer and resented that I was paying tons of taxes. Then my daughter was born and I still had to pay the IRS. I don't think people decide to have children based upon taxes. There are plenty of people who have children that they can't afford. I do believe the birth rate is tied to the weather. If you look at all the children born 9 months after major blizzards I think you would see a greater significance. I imagine other factors such as educational level play a part too.