Yes, Tax Credits Harm Our Children


January 21, 2016 by Anders Ingemarson

It is pre-election season and presidential candidates across the political spectrum are trying to ensure the support of American families. They promise new or improved family friendly tax credits, they declare that they won’t touch programs already in place, or announce that they will replace existing initiatives with better ones. (The Tax Foundation has an excellent site for comparing the candidates’ proposals on various tax related matters, including tax credits.)

This may be effective election tactics but what about the children? Are tax credits—and other government assistance such as preferential income tax rates, “free” government (“public”) education, subsidized student loans, Head Start and other child related social programs—of benefit to or harming children?

Providing direct and indirect government financial assistance is like offering a “discount” on having children. “Look,” our politicians and bureaucrats say, “we are lowering the price for starting or expanding a family. Offer good until the next election and beyond!”

And just like a sale on products and services is encouraging a certain amount of impulse behavior, so does a “sale” on having children. When we perceive a good deal on a product we may strike while the iron is hot without having done our homework. The same applies to having children: a reduced price tag, all other things being equal, is reducing the incentive to plan carefully. The analogy only goes so far though. Having a child does not come with a return policy. “Buyer’s” remorse does not apply. The “purchase” is irreversible. And the main victim in case of regret is the innocent party to the transaction: the child.

One argument for family-oriented tax and social initiatives originates in the idea that the family is the central unit of society and that its formation and sustenance should be encouraged and supported through government programs. No doubt, being part of a loving and caring family throughout life is a tremendous value. But the family is not the central unit in society, the individual is. There are no family rights, only individual rights. Promoting “family values” through government incentives is a form of collectivism that not only violates the rights of those who are forced to pay for programs that subsidize the upbringing of other people’s children, but also does a disservice to children who may not be brought into this world for the right reasons.

Another argument is that society needs to encourage reproduction as we need more children to sustain today’s welfare programs for future generations: Social Security, Medicare, Medicaid, Disability Insurance and the like. But considering children a commodity to be used for paying for the excesses of current and past generations is a hallmark of a morally bankrupt society: a society that is willing to sacrifice the individual rights of children for societal gains. Again, collectivism rearing its ugly head.

A society whose members truly value children as unique, precious individuals does not put up a “For Sale” sign by offering tax credits, favorable tax rates, “free” government (“public”) education, subsidized student loans or any other child-related social “benefits.” No, such a society allows the free market to set the price for bringing a child into this world, and leaves it to prospective parents to make their decision without the influence of government initiated “promotions.”

It is true that over time the free market both reduces the price tag for bringing up a child and increases the quality of child-rearing related products and services: educational inventions reducing the number of years required, and consequently bringing down the cost, for a good education; new financial products allowing for “investing” in your child without putting undue strain on your cash flow, not unlike taking out a mortgage on your house; new insurance offerings protecting your family from financial ruin caused by accidents and disease from pregnancy through birth, childhood and adolescence; employers competing for talent by offering subsidized child care and parental leave solutions.

But in a free market society this is a result of the intricate supply and demand interaction between thousands upon thousands of individuals: visionary entrepreneurs and other enterprising men and women introducing new products and services that are either accepted or rejected by parents constantly on the lookout for the best their money can buy for their child. It is not a result of top-down political and bureaucratic decisions in support of some collectivist, individual rights violating agenda, be it of the “family value” or “sustain the welfare system” kind.

Furthermore, through charitable activities the members of a free market society benevolently and generously “fill in the cracks” to support parents and children who, through no fault of their own, have fallen on hard times.

By refusing to let the child be a pawn in collectivist schemes, it is ensured the freedom it needs to flourish. And by allowing parents to take full financial and social responsibility for having a child, it is more likely to be truly welcomed, cared for, and loved.

When choosing a presidential candidate, don’t look for one that wants to meddle in your life by offering a plethora of tax credits and other handouts. Look for someone who lets you keep more of your hard-earned money without any strings attached, and that leaves you alone to decide what is best for your child.

2 thoughts on “Yes, Tax Credits Harm Our Children

  1. Douglass Holmes says:

    There are politicians who favor policies that focus on group rights defined by sex, sexual orientation, race, other victim status, or union membership. There are politicians that favor policies that focus on group rights defined by activity, such as business people, church people, or family people. If the choice is between policies that must choose between victimhood or activity based groups, I’ll support the policies that favor activities, especially activities that I favor such as business formation, family formation, or traditional community organization (as opposed to the more modern community organizations that define victims and purport to help them).

    If the choice is between a politician who favors group rights over a politician who favors individual rights, I’ll go with the one who favors individual rights. It just seems that there aren’t enough of those politicians.


  2. Darrell says:

    Anders, your argument makes sense in a vacuum. If there were no Social Security, Medicare or other government program for caring for the poor or elderly, I would agree that there would be no need to have incentives for having children. However, that’s not the world that we live in.

    Programs for caring for the poor or elderly discourage people from having children. People know that their retirement income is solely dependent upon the amount of money they earn. That’s how Social Security is calculated. However, without Social Security or other such programs, people would have limited choices in preparing for old age. One way would be to save money, of course, but the other way would be to have many children in the hope that at least a few would care enough about their parents to help them when they were old. That is the way things used to work before the modern welfare state.

    The proof is in the pudding. Many “advanced” Western societies are dying. They’re having fewer and fewer children because the math doesn’t work. Everyone is depending on someone else to have children to pay for everything. The result is an aging population with no one to pay into the social welfare programs. BTW, saving money in the stock market won’t help either if there is no one to work in the factories or other businesses. Economic prosperity depends, to a large extent, on population growth, or at least stability.

    Germany, for one, is trying to address the situation by allowing millions of people from the Middle East to immigrate and presumably replace their lost labor force. The problem is that the people who are immigrating don’t have the same belief system as the people they are replacing. The result is civilizational suicide. Those people who are having children have little hope for the future of those children. The immigrants don’t have the same respect for freedom as the original inhabitants, and though the original inhabitants never fully embraced freedom themselves, the immigrants are much worse.

    In a more rational age, perhaps wealthy individuals would use some of their wealth to encourage people to have children. After all, children are the producers and consumers of the future and encouraging people to have children could be good for the bottom line of a business willing to take the long view. However, the fact of the matter is that until we live in a fully free society, government must provide incentives for people to have children. The alternative is the death of our civilization. For that reason, such incentives should be the last thing to go.


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