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Are child tax deductions a step down the slippery slope to serfdom?

This post, in which First Things contributor Greg Forster makes what he calls "The Moral Case Against Child Tax Deductions", is a strange piece of reasoning. Here is Forster's argument in a nutshell:

The rule of law is a much higher moral imperative for government than encouraging fertility. The rule of law is our only defense against arbitrary (and therefore, ultimately, tyrannical) use of political power. Fertility is encouragedthrough many social systems; no one argues either that government is the social system with primary responsibility for fertility, or that promoting fertility is a core competence of government. However, preserving the rule of law is governments core function and only the government can preserve it.What the rule of law requires above all else is stable rules that are fair and the same for everyone. Our current tax code is one of the primary threats to that core value, which is why the editors of the Journal have invested so much of their time, effort and social capital over the years in fighting to restore the rule of law to our tax policy.

Let me take a stab at diagnosing the fallacies here.First, it is just not true that whenever the law treats different people differently, it thereby embodies rules that are not "the same for everyone". For example, consider the law that sets the minimum voting age at 18: in one sense this law extends a right to some people and not to others, but clearly this does not amount to unequal treatment, as under this law everyone has the right to vote when they turn 18 (unless they forfeit this right in some way, perhaps by committing a felony). Similarly, a tax code that offers tax deductions for childbearing (or home ownership, or health care benefits, or ...) is a code under which the rules are "the same for everyone" insofar as under such a policy, everyone has the opportunity to receive the same tax deductions in the same life situations: that some people do receive them while others do not is evidence of inconsistency, not in the rules, but in the factors that determine the upshot of their application.Suppose, though, that when Forster says the tax code should be "the same for everyone" he means something more specific than this, namely that everyone (over some age, perhaps) should be taxed in exactly the same way, without any credits or deductions based on particular circumstances. Even if we were to accept this claim, it is pretty clear that it describes any number of possible but incompatible tax policies -- for instance, here are three of them:

  1. A traditional "flat tax" on income, where every citizen's income is taxed at a rate of n%.
  2. An even flatter tax, where every citizen pays $n in tax dollars.
  3. A national sales tax, where all expenditures are taxed at a rate of n%.

Each of (1), (2), and (3) admits of multiple descriptions, some of which make them look like policies where taxes are "the same for everyone", and others of which do not: for example, we could describe (1) as a policy where everyone pays the same rate but also as one where some people pay a larger number of dollars in taxes than others, (2) as a policy where everyone pays the same number of dollars in taxes but also as one where some people pay a greater portion of their income in taxes than others, and (3) as a policy where everyone is taxed on the same portion of what they spend and also as one where people who spend more pay more in taxes and people who spend a larger portion of their income pay a larger portion of their income in taxes. (And this is not all: for we need to determine who counts as a citizen, what counts as income and expenditure, whether to tax even those who do not earn any money, etc., and none of these are trivial tasks.) So how do we decide between these possible policies (preferring, hopefully, (1) and (3) over (2)), given that each has the same claim to make the rate of taxation "the same for everyone"? Clearly the answer is: by answering the question which of these tax policies is MOST JUST, where this requires appealing to factors -- such as the precarious financial situation of the working poor -- other than mere consistency. And once these factors are on the table, what could be wrong with using them to make the tax code even more just, in virtue of being flexible in yet further ways?Here is what I take to be Forster's response to that question:

Changing a tax rate doesnt implicate the rule of lawvery much because the rate is the same for everybody. If we are going to tax capital gains at all, we have to set a rate, and that makes it legitimate to argue about what the rate should be. You can make a case that it should be higher or lower, but whatever case you make, youre asking for the same rate for everybody. Youre not asking the government to tax capital gains at one rate for one set of people and another rate for another set of people. Youre not encouraging the government to use its power to create two sets of rules for two classes of people.Creating a tax deduction does implicate the rule of law. Youre taxing income, but youre taxing it at one rate for one class of people and at another rate for another class of people. Youre reinforcing governments perennial and pernicious habit of dividing the public into classes and showing favoritism to one over the other. This is the road down which the destruction of our freedoms awaits.

But we have already seen how this argument goes wrong. Just as a tax policy according to which rich and poor alike pay $n in taxes, and thus where the poor pay a greater portion of their income in taxes than the rich, is wrong not because it creates "two sets of rules for two classes of people", but because the set of rules it creates is obviously unjust, so a tax policy that employs progressive rates and offers various credits and deductions, all of which are equally available to any member of the population depending on income and circumstance, needs to be evaluated not in terms of its supposed "favoritism", but by asking whether its outcomes are just ones. Of course the possibility that a certain tax policy will lead to "the destruction of our freedoms" is among the considerations relevant to this inquiry, but we have been given no reason at all to believe that child tax deductions -- as opposed, say, to low birthrates or a widespread inability of parents to afford health care and quality education for their children -- are likely to have this consequence.

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"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." -- Anatole France

Yes, there is also that!

John, I agree, and I'm glad you posted this. I started to draft a response of my own on the FT website and gave up.Tax policy is one of the effective arrows - and there aren't many - in the government's fiscal policy quiver. Why would we want to take it out of play? I suppose the conservative purist would answer, Because there is overwhelming evidence that government can't be trusted to play fair with the tax code. That that government is unfair with its tax breaks is pretty much undeniable; but the answer, in my opinion, is not to hobble the government's ability to pursue sound fiscal policy via the tax code, but to work for good government that does the right thing for those who need the most help.

The Conservative complaint has been about progressive tax rates.. With the Romney/Buffet disclosure that the 1% pay at 15% we should all know that the 1% have successfully established a regressive tax structure, Romney pays @15% Obama pays at 33%. All other tax discussion is a dodge. the GOP wants the capital gains rate , their rate, to go to ZERO.. Please don't post that the mom and pop use capital gains too.. when they sell the house on the way to the 'home'.

Ed, I agree that the tax rate, as you've described it, is regressive. I disagree that this is a Republican monopoly. If you think that the 1% don't bankroll Democrats (certainly including President Obama) you haven't been paying attention.

Jim P. --The first question is: which party is most responsible for the tax laws? Obviously, it's the Republicans. Second question: are the tax laws fair? Answer: Obviously, no. They favor the very, very rich to the disadvantage of all the rest of us. The poor get poorer and the lower middle class turns poor. Third question: how can anyone seriously defend a candidate for president who champions these unjust laws? Your turn to answer.

The first question is: which party is most responsible for the tax laws? Obviously, it's the Republicans. Second question: are the tax laws fair? Answer: Obviously, no. They favor the very, very rich to the disadvantage of all the rest of us. The poor get poorer and the lower middle class turns poor. Third question: how can anyone seriously defend a candidate for president who champions these unjust laws?Note that if we applied that logic consistently, it would be impossible to support any candidate for the presidency. In fact I agree with this conclusion, but ...

John S. ==Sometimes logic leads to two bad alternatives, and our only choice is the lesser of two evils. That doesn't make a candidate's platform defensible. I'd vote for Romney over Paul in a trice if they were my only two choices.

Ann, you are forgetting the choice not to vote.

Whereas, what, raising your child in greater want as a result of not getting the deduction is the route to freedom? I won't even join this argument because the underlying, binary terms are so offensive. Tax POLICY has provided deductions for all manner of things for better than 100 years as a reflection of voter priorities. It's like they woke up one day with complete amnesia about the society they actually live in and instead appear to inhabit a vacuum where abstract principles are the ONLY thing that matter with respect to human happiness or freedom. Well, we ran out of money to feed the family for the rest of the week but thank God we live in a society without tax deductions for children!

"The first question is: which party is most responsible for the tax laws? Obviously, its the Republicans. "Democrats and Republicans are equally responsible. Republicans established the rates, and Democrats refused to let them die a natural death.

Barbara - I couldn't agree more.

Jim P. ==And why did the Dems permit the tax break of the super-rich to continue? Because the Republicans made that a sine qua non of a package deal that involved more important matters being passed -- health care reform or one of those other Democratic priorities, I forget just which. The Dems didn't just say, Hey, Mitt Romneys of this world, here's your free $2.5M for this year.

What else to expect from First Things. Again, where is that sense of the common good.

What else to expect from First Things.Well, this did follow two posts that argued the contrary position very forcefully.

I wonder if the people who have their knickers in a knot about child tax deductions would be as incensed about mortgage interest deductions, charitable contribution deductions, etc.? "Creating a tax deduction does implicate the rule of law. Youre taxing income, but youre taxing it at one rate for one class of people and at another rate for another class of people."But, middle class and upper class welfare is what is sacred, isn't it?

"Democrats and Republicans are equally responsible. Republicans established the rates, and Democrats refused to let them die a natural death."Or, to put it another way: "Any man can make mistakes, but only an idiot persists in his error."Marcus Tullius Cicero

"Democrats and Republicans are equally responsible. Republicans established the rates, and Democrats refused to let them die a natural death.' The GOP held unemployment extention hostage and Dems caved. It is not true in any way that both parties want the tax rate to remain the same.. Watch Republicans refuse to pass anything unless the BUSH TAX CUTS for the top 3% are continued beyond Jan 2013.

Oops, thanks, Ed. I knew the compromise was something life or death for the less than affluent.Ah, the ever-generous Republicans extortionists -- generous to the "successful".

"The GOP held unemployment extention hostage and Dems caved."Is this statement supposed to exonerate our elected Democratic officials in Washington from responsibility for the tax rates now in effect?

Jim P. --Who is more responsible for a bad outcome -- the extortioner or the extortionee?

Ann, I don't accept the offered metaphor of Democrats as victims. I don't suppose their constituents sent them to Washington to be victimized.

Jim P. ==I wasn't thinking of the Democratic politicians as victims. It's the politicians' constituents who were/are out of work (having been laid off in a recession that should not have happened) whose unemployment insurance was being non-renewed by the Republicans. Make no mistake -- this Republican indifference is a matter of ideology -- if you can't support yourself and your family, it's your fault and don't expect any help from the rest of us, whether from the national or local level. Republican subsidiarity seems to fail when it means paying taxes to support the out of work for as long as is necessary. So the helpless (I mean that aliterally) continue to suffer.My point is that the Republican politicians held the laid-off hostage until the Democrats agreed to allow the super-rich tax rip-off to continue. Face it, Jim, your party is the party of the super-rich, and the super-rich have been very successful not only in making money but in persuading non-superrich conservatives that because the super-rich are "not like you and me" they aren't obliged to pay their fair share of taxes. Ah, Gatsby. The American nightmare.C'mon -- why do you think Romney is being coy about releasing his tax returns? As the saying goes, if there is nothing to hide, he would release them. If there is something to hide, he would not release them. So . . . OK, so eventually he'll have to, but only after he's sewn up as many delegates as possible.