Wednesday, August 15, 2007

Like Children? Tax Them Less

Another item that won't make it into the MSM:

...after two decades of neglect, the U.S. Congress in 1986 nearly doubled the value of the personal income tax exemption for children to $2,000 per child, and indexed its value to inflation. Repeated studies have found that European child allowances-where the state pays mothers a monthly stipend for each of their children-have little positive effect on fertility. However, in the U.S., there is strong evidence of a "robust" positive relationship between the real, after inflation value of the tax exemption for children and family size....

Why this difference? It appears that allowing families to keep more of what they earn while raising children-that is, turning children into little tax shelters-has a positive, even life-affirming psychological effect on parents that money coming from the state cannot replicate. In any case, the significant increase in overall American fertility coincides with the sharp increase in the exemption's value in 1986. More recently, the rise in marital fertility, starting in 1996, correlates precisely with the introduction of a new, additional Child Tax Credit that year. It seems that pro-family tax cuts work!"

Don't like children? Then don't ask them to pay your Social Security later on, jackass!

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