“Having a two-year-old is like having a blender that you don’t have the top for” – Jerry Seinfeld
An article has been making the rounds lately about how the average cost of raising a child has grown to $241,080 over 18 years. I haven’t read the full report, so I can’t vouch for the accuracy. I will not that averages are generally bad statistics when it comes to incomes or expenses – which fall on more of a Boltzman distribution (we typically prefer median). Be that as it may, we will assume for now that the cost of raising a child is “large” and perhaps even in the quarter-million range.
What I can tell you with a fair bit of confidence is that the cost of raising a child certainly is more than the tax benefits and credits the government gives to a parent. As a matter of policy preference I would prefer that the government (which is the people) make no special carve-outs for raising children. But, I also prefer that the government (which is the people) make no claims on the future production of children. The current set up meets neither condition.
The way I see it, if the government is going to claim the future productivity of my children (or a portion thereof) then they should recompense me for the cost of raising those children (or an appropriate portion thereof). I’m more than willing to use $241,080 over 18 years as a starting point, and will anxiously await my $53,573.33 annual tax credit next year (I have four kids). OK, that would be if the government claimed all future production. Perhaps we should assume they will only claim 1/4 (though it is a good bit higher in some locales), so I’ll be looking for that $13,393.33 credit. Perhaps I should not hold my breath.
It’s an interesting problem form a policy standpoint. I know quite a few parents who would rather have no handouts from the government for raising children in exchange for being freed from the burden of the tax system that funds benefits with their production (and eventually their children’s). I also know quite a few DINKs (Dual Income No Kids) who would gladly forgo all future social security, medicare, medicaid, and other “safety-net” payments in exchange for not having to pay those taxes now. (And, while we’re at it, they’d love to not have to fund the education system that they don’t use.)
So who is making the demands? Well, I suspect it happens in multiple steps. People in general, and Americans in particular, are uncomfortable with the notion of not being in charge of other people. Couple that with a general propensity for people in “democracies” to vote themselves a share of other people’s production, and you find yourself with a system whereby the lives and paychecks of the working people are claimed (several times over) by people far and wide.
In such a set up, where people doing the hard work of raising their children are continually watching those children bear ever-increasing burdens to support the welfare state (which is far broader than simply “handouts to poor people”), voters who are also parents will start to push back. The simplest way to do so, is to just grab a little bit back, like deductions and some paltry tax credits. Fair payment? No way, but it’s better than nothing.
As for the true cost of raising kids, I will say that the mental and emotional costs are far greater (as are the rewards) than the bean-counting can capture. But the article wasn’t about that, just the dollars.
OK, I’m off to work now. The grocery bill isn’t going to pay itself …