[extropy-chat] [SALT] The DEpopulation Problem, this Friday (for forwarding)
mlorrey at yahoo.com
Thu Aug 12 20:48:45 UTC 2004
--- Brian Lee <brian_a_lee at hotmail.com> wrote:
> >From: Mike Lorrey <mlorrey at yahoo.com>
> >The problem with this logic is that income does not increase with
> >additional child, so for a given income, there is a maximum
> >number of children. The more income that gets taken in taxes, the
> >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
> >proportionately to the incremental cost of raising each child. If
> >per child deduction does not meet or exceed the per child rearing
> >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.
How do you argue that? The deduction comes off the front end of income.
The more you earn, the less that deduction is worth because it is a
decreasing percentage of your income. Ergo, if you are in a higher tax
bracket, any given deduction is worth less UNLESS it happens to drop
you into a lower bracket.
> 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,
> 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.
Again, the problem with this is that it is only beneficial to have
additional children if the cost of rearing a child is equal to or less
than the deduction. A family may be able to afford another child more
than without the deduction IF they stay in the same tax bracket. The
deduction may be worth more in the end living in a more oppressive tax
regieme, but the problem is that the overall tax burden is still a
higher barrier to entry than under a low tax regieme. You're picking
nits but ignoring the swarm.
> >Finally, the per child tax deduction only applies to income taxes.
> >Child related consumption causes sales tax payments, and each
> >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.
That is a strategy, but one that few families engage in. Government
also tends to frown on maximizing bunking, because since children's
education gets paid for by property taxes, they tend to impose limits
on occupants per room in either zoning, building, DCYF or other
While you can decrease your costs on each additional child, it is still
an increasing burden that does not encourage child rearing unless the
costs are less than deductions allowed per child.
> I think it boils down to certain "fixed" child rearing costs such as:
> health insurance
> public education
> 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)
Public education may not have much variance (except of course that
additional children put additional burden on the school system as a
whole, which raises property taxes). However, public schools are not
the be all and end all. You have day-care expenses on a per child
basis, summer camp, and if you send them to private school, you pay
property taxes PLUS private school tuition on each child.
Finally, college education costs are distinctly on a per child basis,
as is auto insurance once the kids start driving.
Chairman, Free Town Land Development
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
-William Pitt (1759-1806)
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