My latest Reuters Opinion column, on Utah Sen. Mike Lee’s FFOTRA, is up.
But I also wanted to share Brad Wilcox’s article on how a new child tax credit might help mitigate the family stability divide:
One central reason that marriage is in retreat and families are more fragile in poor and working-class communities across the nation is that the economic foundations of family life in these communities have been eroding. For instance, less-educated men have seen their real wages fall since the 1970s, and they are now much less likely to be able to find and keep a full-time job, as Figure 3 indicates. Because money matters when it comes to forming and sustaining a family, the falling economic fortunes of these men seems to help explain why nonmarital childbearing has surged and divorce remains high in poor and working class communities.
To help American families, Senator Mike Lee is proposing a $2500 child tax credit that would apply to both income and payroll taxes (above and beyond existing child deductions and the $1000 child tax credit). Because many working-class and poor families pay little or no federal income tax, his focus on payroll taxes would put real money in the hands of these families. As sociologist Andrew Cherlin and I wrote in a recent policy brief for the Brookings Institution, a policy move like this is likely to: “increase marriage rates and marital stability among low- and moderate-income families who would benefit from the economic security such a policy would provide to their family finances. It would also signal to them that the nation values the parental investments they are making in the next generation, who—it should be noted—will be helping cover the cost of Social Security and Medicare in the near future.” Indeed, experimental efforts to boost the income of working parents in Minnesota and Wisconsin have been linked to higher marriage rates and lower divorce rates among low-income couples.
Like Brad, I believe that we need a wider array of policies designed to bolster incomes at the bottom. For example, we might embrace certain aspects of Sweden’s earned-income tax credit, which is tied to individuals rather than households, and in which the size of the wage subsidy is unrelated to the number of dependents. Low-income workers without children get some benefit from the current U.S. EITC, but not very much. Making the EITC more generous for childless adults, and non-custodial parents, could go a long way towards encouraging labor force participation, bettering the lives of low-income workers, and, perhaps, making less-skilled men more attractive marriage partners.
In the next National Review, Oren Cass has an article on how we ought to rethink poverty policy that merits wide attention.