Is America stiffing its parents?
Robert Samuelson writes that the government isn't doing enough to offset the growing cost of raising a child. Worse, if we don't do more soon, parents will decide to stop having children altogether, and the population drop-off will lead to economic decline.
First, let's look where Samuelson is right. Population stagnation is a problem, and it's one reason the Untied States is blessed with a vibrant immigrant population that should be the envy of Europe, rather than a problem for conservatives to fix with harsh anti-immigration laws.
But the decision to have a child isn't determined exclusively by tax rates. Higher rates of female education typically reduces fertility. As Bryan Caplan explains, "If you raise women's education, you raise their potential income; and as you raise their potential income, you raise the cost of fertility."
What's more, the federal government does promote having children quite a bit, with personal exemptions, a child tax credit (which doubled to $1,000 in 2001), a child and dependent care tax credit, incentives tied into the Earned Income Tax Credit, plus thousands of dollars families can set aside for child care and education. The full tax benefit of children varies greatly with income and number of young 'uns, but total deductions and refundable credits can easily pass $10,000 a year.