Santorum, Children, and the Economists
The Wall Street Journal has a generally positive view of Santorum’s pro-growth policies. But here’s a tough criticism:
Most disappointing is the Pennsylvanian’s proposal to triple the tax credit for children (from $1,000 today), which is a hobby horse of the Christian right. This is social policy masquerading as economics. Unlike a cut in marginal tax rates, a larger tax credit does little for growth because it doesn’t change incentives to save, work or invest. It merely rewards taxpayers who have children over those who don’t.
Mr. Santorum is essentially agreeing with liberals who think the tax code should be used to pursue social and political goals. Yet a major goal of tax reform is to make the tax code less of a political free-for-all. The best tax code is one that raises the revenue the government needs with the least amount of economic harm and misallocation of resources.
A writer for the Washington Post regards that alleged weakness of Santorum’s tax policy as actually a strength. It’s obvious that one purpose among many of tax policy is the pursuit of social goals.
Someone might add that children are indispensable for growth, and we don’t have enough of them. Our “demographic issue” is too many elderly Americans and not enough young ones. Trends in the direction of personal longevity and a birth dearth threaten the sustainability of our entitlement programs, of Social Security and Medicare.
Those trends are that more and more unproductive Americans are becoming dependent on fewer and fewer productive ones. That can’t be good for future prosperity or growth.
Surely our tax policy should include this premise: We all should be required to contribute to the future of our country. Some mainly contribute money, according to their means. Some mainly contribute lots of kids.
There is, of course, in a free country no requirement that anyone have kids. But surely our situation is one in which we should “incentivize” and reward having them. Children are intrinsically lovable and all that, but they also should be affordable.
Calling this policy “a hobbyhorse of the Christian right” reminds us that it is, in fact, our observant religious believers who are having a disproportionate number of children. That’s no doubt because those believers don’t think of themselves mainly as the isolated, self-interested individuals the economists describe, but more like the social, reproductive animals the Darwinians describe.
There’s no denying that we benefit when a significant proportion of our population thinks of themselves as primarily as parents, and it makes sense for our tax policy to encourage such thoughts.
Santorum reminds us, in some ways, of the old, New Deal Democrats by thinking in terms of family and social responsibility and by not joining the libertarians in regarding each of us as mainly a liberated individual. That probably means he won’t get the Republican nomination, but it might also mean he’s added something distinctive and provocative—or socially conservative—to our national debate.
UPDATE: It turns out the WSJ is just wrong about the size of the additional tax break Santorum would give for kids. He was talking tax deduction, not tax credit. So we’re not talking much real money at all.
