Friday, January 20, 2012

Pro family

The current National Review explains why the Wall Street Journal is wrong when it faults Senator Santorum for advocating increasing the tax deduction for dependent children:
Senator Santorum has a tax plan that, among other things, triples the personal deduction for children. Other candidates, such as Speaker Gingrich and Governor Perry, have similar provisions in their plans, but for some reason our friends at the Wall Street Journal have been particularly troubled by Santorum, zinging him in both an editorial and a Kimberley Strassel column. .... Making it easier for families to raise children is a mere “hobbyhorse” of Christian conservatives, in their view, and provisions of the tax code that recognize the costs of parental investment in children amount to special favors for those “Americans fortunate enough to have a child” (as Strassel puts it). The Journal does not treat low taxes on capital gains as special favors for those fortunate enough to have investment portfolios, even though they too look like preferential treatment to the untutored eye. It is right not to: Treating capital-gains income like labor income would create a bias in favor of consumption. For the tax code to treat parental investments in children like consumption would, likewise, create a bias against parents—whose financial sacrifices swell the future coffers of Social Security and Medicare while earning them no additional benefits from those programs. Expanding the child credit, or increasing the child deduction, is not a special favor but the reduction of an unfair tax. All conservatives should ride that hobbyhorse.
As someone who is not "fortunate enough to have a child" I have never objected to tax provisions or negotiated contract provisions that advantaged families with children. I've always thought they were something to be encouraged.