Culture > Q&A

Show them the money

"Show them the money" Continued...

Issue: "Blind exiled brave," Aug. 10, 2013

What should we say about the tax burden on middle class families? In 2008 the chief difference on taxes between the Republicans and the Democrats was that conservatives wanted to cut the corporate tax and to keep the top tax rate low: Nothing in that for middle class people directly. Reagan cut middle class tax rates and kept middle class taxpayers from being constantly kicked into higher tax brackets by inflation. There has to be, I think, a middle class component to the tax message: We should expand the child tax credit so middle class families get some relief.

Our audience of Patrick Henry students here may not be familiar with the impact of the child tax credit. How valuable are they now to their parents, and how valuable do you think they should be? That’s a trickier question than it sounds like. The current size of the tax credit for children is $1,000. I think it should be about $5,000. But what a lot of people—even sophisticated tax analysts—overlook is the way our entitlement system combines with our tax code to discourage people from having kids.

Tell us about it … Before Social Security and Medicare, one of the reasons people had kids was to take care of them in their old age. That basic generational bargain is still in effect: It’s just been socialized and collectivized by Social Security and Medicare. As is often the case when you socialize something, you’ve changed the incentives. So right now if you don’t have kids you get the benefits of Social Security and Medicare made possible by other people making the financial sacrifices necessary to raise children. If you actually do the math on that, you need something like a $5,000 tax credit in order to make the government neutral on the question of whether you should have more kids.

Do you think a $5,000 tax credit would lead parents to have more kids? It’s not bribing people to do something they don’t want to do: Extensive international evidence says that doesn’t work. We are in a country where what demographers call ideal family size or desired family size is larger than actual family size, which suggests that people would have more kids if the economics of it was a little easier. 

One more question: Why are winners of the National Spelling Bee almost always either homeschoolers or kids of Indian ancestry? Are there ever homeschooled Indian kids?

Watch Marvin Olasky's complete interview with Ramesh Ponnuru:

Marvin Olasky
Marvin Olasky

Marvin is editor in chief of WORLD News Group and the author of more than 20 books, including The Tragedy of American Compassion. Follow Marvin on Twitter @MarvinOlasky.


You must be a WORLD member to post comments.

    Keep Reading


    Life with Lyme

    For long-term Lyme patients, treatment is a matter of…