I just finished the book The Baby Boon: How Family-Friendly America Cheats the Childless by Elinor Burkett.
It was a great topic, but a crappy read. Basically, I wish I could have written it for her. It was too disorganized and informal to get across the myriad statistics and descriptions of family-friendly policies and bills she had to offer.
Her basic point was how, ultimately, the government is choosing to subsidize one type of family over all of the other versions of family that we, as Americans, create.
She argues for "horizontal equity" in our tax system: The concept is simple: that the tax system should be designed so that taxpayers with the same means--with the same ability to pay--are treated rouhly equally. Or, put another way, people of the same means should make sacrifices that are equally painful.
Of course, this is impossible to do in any exact way. Because we are all different and because we all have different tastes for consumption, we end up having different "abilities to pay." Some have bigger mortgages than others, more children, higher medical expenses and commuting costs or a greater need for nice work clothes.
So, to rectify this, the tax code tries to hold everyone "harmless" from things that would make them less able to pay than others in the same economic position.
The big questions here are:
1) how to level the playing field? and
2) to what degree do we hold people "harmless" for something/everything/anything?
There are simple cases like the guy who gets into a terrible accident and, as a result, faces hue medical bills. The government doesn't reimburse him for his costs, but the IRS lets him account for the accident tax-wise.
Similarly, we all would agree that luxury spending shouldn't be on the list of tax breaks.
But where do we draw the line? And, specifically, where do kids fall in that spectrum?
Burkett never actually uses the words, but what she is hinting at is the degree to which we consider kids either a public good, or having large enough positive externalities to warrent public support.
She quotes two economists from the University of Michigan and authors of Taxing Ourselves, Joel Slemrod and Jon Bakija: Having children is largely a voluntary choice, and may even be viewed as a matter of personal consumption preference from the point of view of the parents. Some adults prefer to save up and spend their money for a round-the-world trip, while others prefer the joy of children with the attendant costs of food, diapers, Nintendo, and possible college. Is it fair to reward adults who prefer to have children, at the expense of adults who prefer other ways of spending their money?
The author concedes that kids aren't like trips around the world and thus, it is fair for parents to get tax deductions. But, she asks, [h]ow many additional tax breaks should the parents receive?
I.e. "family-friendly" policies. Without any organization or direction, Burkett discusses several "family friendly" policies (on-site subsidized childcare for example) and how the childless end up subsidizing families with children in terms of unequal benefits and extra time spent at work doing the job of parents home with ailing children.
One interesting point she brings up is the origin of the family-friendly policies. She claims that opponents to the Equal Pay Act argued for the "family wage." This was, essentially, a higher wage for men because they were presumed to be supporting a family. Ironically, the tables seem to have turned. Those pro EPA-ers now argue for family friendly policies for parents (not just men, but women too) to help take care of their families. Burkett argues that neither arguments are right or fair.
While I have sympathy for her argument (although I waded through 217 pages of bloviation to find it), she ignores one major argument: equality.
Barbara Bergmann (not mentioned in Burkett's book) has been a vocal supporter of universal child care for all families as well as the industrialization of housework (see a forthcoming update of her classic The Economic Emergence of Women). I have come to agree with her that until women are no longer shouldered with the majority of the costs (implicit and explicit) of raising kids as well as domestic chores, they will never be equal in the workplace.
There are arguments to be made that this really isn't a problem. Women make choices to have kids/stay at home with kids/etc. etc. So, maybe it isn't a problem. Inequality is the price that we pay for some differences associated with biology/socialization/preference, and that's o.k.
If you do, however, see it as a problem. Then I think there is room to argue that the government intervene on to accounts: 1) kids are our future and we owe it to them (even if they aren't ours) some investment and 2) because women do the lion's share of this work, we owe it to them to try to level the playing field.