Tax the Childless

We should slash taxes on parents by jacking them up for nonparents.

Mother carrying sleeping daughters

Parenting may be a labor of love, but it’s a labor that isn’t acknowledged by the tax code.

Photo by Inti St Clair/Blend Images

When my mother was my age, she was working full time while raising three small children, and she spent every spare moment studying to finish a graduate degree. My father was working extremely hard as well. Between the two of them, they were able to provide their kids with a solidly middle-class life. But it wasn’t easy, and it wasn’t always fun. 

So now, as a childless professional in my mid-30s, I often reflect on the sacrifices working parents make to better the lives of their children. And I have come to the reluctant conclusion that I ought to pay much higher taxes so that working parents can pay much lower taxes. I believe this even though I also believe a not inconsiderable share of my tax dollars are essentially being set on fire by our frighteningly incompetent government. Leviathan is here to stay, whether I like it or not, and someone has to pay for it. That someone should be me, and people like me.

Who should pay more? Nonparents who earn more than the median household income, just a shade above $51,000. By shifting the tax burden from parents to nonparents, we will help give America’s children a better start in life, and we will help correct a simple injustice. We all benefit from the work of parents. Each new generation reinvigorates our society with its youthful vim and vigor. As my childless friends and I grow crankier and more decrepit, a steady stream of barely postpubescent brainiacs writes catchy tunes and invents breakthrough technologies that keep us entertained and make us more productive. The willingness of parents to bear and nurture children saves us from becoming an economically moribund nation of hateful curmudgeons. The least we can do is offer them a bigger tax break.

Raising children is not exactly a thankless undertaking, I realize. As many parents will tell you, the satisfactions of parenting can be their own reward. Parents appear to be very into the supposed cuteness of their progeny. I wouldn’t know, but that’s the word on the street. We as a culture still hold parents, and particularly working parents, in high esteem.

Yet it is also true that we’ve stacked the deck against parents in all kinds of ways. The U.S. Department of Agriculture has found that raising a child born in 2012 will cost a middle-income family a cumulative total of $301,970 over 18 years. As high as this number sounds, it is actually a massive understatement, as it fails to take into account the cost of postsecondary education. It also fails to factor in the value of forgone earnings and career opportunities. While nonparents can focus on their jobs in laserlike fashion, parents are rarely in a position to do the same. Every time a sick child keeps a parent home from work, her earnings suffer, either directly, because she’s taking an unpaid leave of absence, or indirectly, because she’s missing out on opportunities to climb the corporate ladder.

Even when we compare a nonparent and a parent who are working exactly the same hours and earning exactly the same income, the nonparent has a clear leg up. Most obviously, the nonparent has far more disposable income to play with, which she can save, to become much richer than her parent counterpart over time, or spend, to travel to exotic locales, to eat out constantly, to wear awesome clothes, or to live as I do in a conveniently located shoebox in a great American metropolis. Raising taxes on nonparents could even the score a bit, tilting the balance ever so slightly in favor of those who toil on behalf of America’s future workforce by wiping their butts and painstakingly removing their head lice.

There are, to be sure, some decent arguments against my soak-the-childless plan. It could be that lowering disposable income for nonparents would actually lead them to delay marriage and child-rearing, as people might want to build up a sizable nest egg before they start being fruitful and multiplying. Or we might take the view that even if we ought to give middle-income parents bigger tax breaks, it is the ultrarich rather than nonparents who should pay for it.

Giving working parents a meaningful tax break is going to cost quite a lot of money—so much money that raising taxes on the ultrarich alone won’t be enough. Recently Utah Sen. Mike Lee, a Tea Party Republican first elected in 2010, released a tax plan, the Family Fairness and Opportunity Tax Reform Act, that preserves the current $1,000 child credit, the personal exemption for children, and the earned income tax credit while adding a new $2,500 child credit. Unlike the current child credit, Lee’s new credit never phases out, so it can be of use to higher-income families. Under Lee’s plan, a middle-income family with two kids earning $70,000 could expect a $5,000 tax cut, which sounds about right.

The problem with Lee’s plan is that it would massively increase the deficit. The Tax Policy Center finds that it would reduce revenues over the next decade by $2.4 trillion relative to the current law baseline. Lee doesn’t propose this, but the most straightforward way to offset the lost tax revenue from parents would be to raise taxes on nonparents.

Right now, Lee’s plan has two income tax rates: 15 percent for all income below $87,850 for singles or $175,000 for joint filers, and 35 percent for all income above those thresholds. You could come pretty close to closing the revenue gap by changing those thresholds to, say, $50,000 for singles and $100,000 for joint filers. Parents wouldn’t have to worry too much about these new thresholds, because the new child credit would still lower their taxes. Nonparents would take the hit. Right now, the 35 percent tax bracket only kicks in at $405,101 for singles and joint filers, so this tweak would infuriate large numbers of articulate and engaged upper-middle-income childless voters who earn more than $50,000.

These millions of nonparents are not good political enemies to have. But does this mean those of us who favor a more parent-friendly tax code should give up? Not quite. Tax reform along these lines could awaken a sleeping giant in American politics, namely the 36 percent of American voters who have a child under 18 in their household. Unlike the retirees and near-retirees who fight tooth and nail to protect Medicare and Social Security, we don’t have a well-funded political pressure group that defends the child credit. It can’t help that parents are too busy raising children to plot and scheme their way to more favorable tax treatment. But if parents were to flex their political muscles, we might have a revolution on our hands. And this nonparent, at least, welcomes the prospect.