[extropy-chat] [SALT] The DEpopulation Problem, this Friday (for forwarding)
brian_a_lee at hotmail.com
Thu Aug 12 20:27:02 UTC 2004
>From: Mike Lorrey <mlorrey at yahoo.com>
>To: ExI chat list <extropy-chat at lists.extropy.org>
>Subject: Re: Re: [extropy-chat] [SALT] The DEpopulation Problem,this Friday
>Date: Thu, 12 Aug 2004 13:14:51 -0700 (PDT)
>--- Brian Lee <brian_a_lee at hotmail.com> wrote:
> > In the US, the tax burden decreases with each additional child. So
> > theoretically, the higher the local tax burden, the greater the tax
> > incentive would be to have children (as the deductions would be more
> > valuable).
>The problem with this logic is that income does not increase with each
>additional child, so for a given income, there is a maximum tolerable
>number of children. The more income that gets taken in taxes, the fewer
>this number is. If a four child family with zero taxes gets a tax
>increase to 25% of income, that family can afford three children. At
>50% they could afford two, and one at 75% tax burden.
>Furthermore, it can also be said that the tax burden DOESN'T decrease
>proportionately to the incremental cost of raising each child. If the
>per child deduction does not meet or exceed the per child rearing cost,
>there is an increasing tax burden per child.
I was trying to point out that if a child allows for a set deduction (lets
say $3000) then the value of that deduction increases with the increasing
tax burden. Under a 25% marginal rate it's $750 but under a 40% rate it's
worth $1200. Of course the family would also be paying more in taxes, but
the value of each child would increase, so you get to a certain tax
percentage where the value of the deduction is greater than the cost of the
child and your kids become, effectively, free under a more oppressive tax
burden where they would cost more under a low tax burden.
>Finally, the per child tax deduction only applies to income taxes.
>Child related consumption causes sales tax payments, and each child's
>bedroom in a home increases property tax payments. My theory deals with
>the whole tax burden, not just income taxes.
I'm also referring to property taxes. My point about the marginal cost of
each child includes property. For example. If you live in a 1 bedroom apt
and have a child, you'll want more space. So you get a 3 bedroom house or 2
bedroom apt or whatever. This increases property tax and forces new housing
expenses. If you have a 2nd or 3rd child, this does not require more space
(just get some bunk beds) so no additional property taxes.
I think it boils down to certain "fixed" child rearing costs such as:
that don't vary linearly with the number of children (you end up with stages
where 1-3 it is fixed, then 4-6 or whatever)
and then "variable" costs (as kids increase and age, these costs go up) such
and finally mixed (can be shared amond kids)
So you do end up with additional sales tax for food, clothing, but for the
big ticket items like houses and cars you don't really have an incremental
cost between 1 and 3 kids (maybe even 4-5 if you start squeezing them in).
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