I remember that piece, Ramesh, and I think you made the same mistake then you’re making now: Counting the extra revenue that new children bring to the entitlement Ponzi scheme but not counting the extra costs they impose on it. Social Security being designed as it is, the latter will in many cases outweigh the former.
It is true that a growing population makes entitlements built on the American model easier to sustain, but U.S. birth rates are at historic lows (more precisely, their lowest rate in more than a century). So that big baby-boom generation’s numbers made it easier to pay for the preceding generation’s entitlements but harder for subsequent generations to bear the costs.
The effects of a child tax credit would have to be pretty large to turn around our demographic trends, and I am not aware of any evidence that the effects are on that scale.
Also, it’s not just childless people who think government-school taxes are unfair to them — the burden falls especially hard on people with large families who pay for private schooling on top of their public-school taxes. That is not a free-rider problem, as you argue; it’s a plain ol’ ripoff.
I think Jay gets it right here:
Bill Buckley and I used to share a complaint about the tax code, and this is the way we would put it, when complaining together: The tax code pits Americans against one another. It pits homeowners against renters, married people against unmarried people, people with children against people without children, people with children going to college against people with children going into trades — and on and on. The tax code is packed with social policy, and bias. That’s one reason I say, a pox on it.
Sure, I’d rather have a tax credit for babies than a tax credit for ethanol, but I’d rather have a flat tax with no exemptions, set at a rate that makes it less of a burden on private life, including family life.