Wednesday, January 21, 2015

Small credit; big pile of tax money

Jane the Actuary looks at whether childcare tax credits help parents - or just government get more tax money.
In this raw fiscal-impact perspective, it makes a ton of sense for the government to push women to work, to increase GDP and tax revenue.  In fact, in discussions in Germany (back a while ago, when we were living there) on state subsidy of childcare centers, this was front-and-center:  these subsidies would more than pay for themselves by increasing tax revenue, and bringing more mothers into the workplace was an explicit goal and method of dealing with the declining working-age population relative to retirees.
 I took off six years from work to raise the boys, and the tax bite was a major consideration. The partner with the lower earnings may be basically working for free - factor in daycare, transportation and added costs due to less time to run the house.
Obama only wants to give out things that benefit his crew.

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