The Corner

Tax Relief for Parents and Its Critics

Rich Cromwell makes four arguments against the expanded child tax credit favored by Marco Rubio in this Federalist article.

First: Tax relief for parents is social engineering. Cromwell sort of concedes that the child credit partly offsets the anti-child-rearing bias created by Social Security and Medicare, but says that it’s wrong to create a new entitlement to undo the damage created by another one. Since neither of these programs is going to disappear into some libertarian paradise, though, we’ve got two choices on this issue: Accept a large implicit tax on larger families, or try to cut it. I’m for cutting it. Cromwell doesn’t squarely face the choice.

Second: Tax relief for parents isn’t tax relief at all. “[Y]ou know what a real tax cut looks like? It looks like money in your bank account. It looks like money that the government didn’t borrow for a minute before giving it back because you made the ‘correct’ decisions.” The government doesn’t borrow the money in a child credit from you and give it back. When you start a job and complete your W-4, you put down how many kids you have. That determines how much money D.C. withholds from your paycheck. Expand the credit, and less will be withheld. Which means, well, money in your bank account.

Third: The existing child credit has not strengthened families. No evidence is presented for this view, and for that matter no metric is proposed to judge whether families have been strengthened. Let’s say we had good studies showing that the modest child credit in existing law had increased the number of children born to married couples. Wouldn’t Cromwell and like-minded critics of the child credit just say this was a sign that the policy was the social engineering they dread?

Fourth: Increasing the child credit won’t raise economic growth. Fair enough. But it will help build the popularity of a tax plan that includes pro-growth measures. Cromwell says that Rand Paul’s plan is better, because more focused on growth, than Rubio’s. The Tax Foundation disagrees, finding that Paul’s plan would raise GDP over the next ten years by 12.9 percent while Rubio’s would raise it by 15 percent.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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