Friday, February 02, 2007

Want a tax refund??? Have more kids...

Okay, I've known for a long time that we can't afford kids yet. I mean we can, but not comfortably. Anyway this year I realized that with each child if you are married and make less than $110k, you are able to get a $700/per child tax credit. Insane.

Sure it costs more to have kids, but on a message board someone is getting $9k back from the government on top of not paying any taxes. Holy Cow. Here's the woman's post "Yes, you can definately get back more than you pay in.We have 8 children and hubby claims 10 on his W4 so they hardly take out anything and our return (fed. and state) is almost $9000 this year! Rebuilding EF, paying off son's private school tuition for the year, and the van!!!"

I am okay with people not paying taxes, when we pay a lot. However I wonder if it's fair to get back so much when they pay nothing in? It makes me wonder if someone pays no taxes, makes $60k and gets a $9k refund doesn't that mean they are making substantially more than someone who has 1 or no kids making the same? Does it equal out having kids and paying less taxes?

I don't know. I guess it just got me thinking that having kids really isn't as expensive as people think. With these tax credit and incentives, it seems like we're encouraged to have children. But this is all hypothetical. Mainly it's coming because I'm sad at how much in taxes we have to pay. But for what it's worth, it's because we chose to live in a high cost of living area. So I'll accept full responsibility for that, until we are able to chose to live in a cheaper area.


D said...

Interesting thought, but I have to share - I am one of the many children, no tax paying people. Or at least for another year.

What I can tell you, children are huge expenses. At the same time the most important asset a person could ever have. Studies have been done showing from birth to 18 a child cost $160k and up. Divide that by 18 years and you get roughly $8889 per year.

As you can see, the mentioned comment about getting $9k back is not getting back more than they pay. They are just being helped to exist.

Please also consider that those $8800 for each child are being put back into our economy.

I will almost guarantee you that the person you spoke about, if like me, is spending way over that on their children. Last year alone, for my family I paid out $8000 for educational purposes, not including college costs, clothing, medical and all the other supplements to our economy.

I guess my point is, it balances out. To not give the credits to a parent for a child, would be the same as taking away the deduction of ones self from their return.

It's a complicated issue. But when broken down, is completely understandable.

Living Almost Large said...

Here's the thing, you get EIC and Child Credit no matter where you live. However the $38k needed to qualify is a lot more in say Arkansas than say Chicago. Meaning isn't unfair that it's not adjusted for where you live? Does it not matter that some places $38k is luxury, but other is barely suriving?

Also why should people get money back from the government just for choosing to have children, when I've chosen to not have children for financial reasons until I can afford it?

I get they need a break, so they can be exempt from taxes. However, to get back $9k is a huge raise to their incomes. That makes their gross annual income more than say a couple with 2 kids who make the median $45k? Correct? Where is the fairness in that?

And if you paid $8k for educational purposes, was it tough? And if it were tough, why did you have so many children? Isn't it a choice to conceive children you can afford?

Why am I penalized for having a high income and choosing to wait to have kids? I will not qualify for the credit and I am also choosing to not have more children than I can comfortably afford.

Thus I am in favor of a flat tax, exempting a set amount for the lower class. I'd take it with no deductions.

I paid enough last year in taxes to buy a luxury car $40-50k. This has been true for the past two years. Before that we barely made more than $40k gross together annually in Southern CA. And that is working full time 40+ hrs a week. So it's not like we haven't been barely making above minimum wage.

So where's the fiarness?

Anonymous said...

(disclaimer: this is the thoughts of a middle-class taxpayer with 3 kids)

Looking at the original numbers, I can only see $5600 (8 * $700) as being given to the family, the rest of the $9k must be tax refunds.

From the government's standpoint, it makes sense to encourage as many children (read: future taxpayers/workers) as possible, or at least to the point where society can support them. Social Security especially is dependent on a certain worker/retiree ratio to stay current, and a lot of the "shortfall" panic is a prediction that we will fall below that ratio.

The $700/child credit may or may not be too generous considering there is already a per-person deduction. I can say personally that it falls far short of the cost of raising a kid, but I also ackowledge that it's not the gov's job to bankroll my offspring.

Living Almost Large said...

I thought the child tax credit was $1k per child? Also these people are not getting back what they paid in, they are getting a redistribution of wealth from people who pay in a lot like us (DINKS).

Rose said...

I don't make a lot of money and I don't have kids for just that reason. I don't understand why MY taxpayer money goes towards paying for other people's children. I understand it is costly to raise children... that's why I haven't had any. I don't think the government has any business paying people for breeding. It really really ticks me off.
Someone in my same financial situation with 2 kids would more than double their income with tax returns... not to mention how much aid they get with food stamps, healthcare etc.

Jonathan said...

Arguing that kids are an investment because of a possible LABOR SHORTAGE is a fallacy because we currently have >9% UNEMPLOYMENT (about double that for 'real' unemployment).