Don’t Let Government Give Up on Family : Taxation: An increase in exemptions for children does nothing for parents who stay home rather than use child care.

We have become so insensitive to what it takes to sustain families that when our policy-makers finally come up with a proposal that they claim is “pro-family,” it actually undermines the foundations of the family.

Several Democratic presidential candidates have said that they favor increasing the personal tax exemption for children. The White House, not to be outdone, is said to be considering a similar measure; conservatives are especially enthusiastic because it is said to be “pro-family.”

It is true that parents will have some extra cash in their pockets if the exemption is increased. Such a tax cut, however, discriminates against families that dedicate more time to their children and hence have less taxable income. Parents who decide that one of them will stay home while the children are young, parents who share one job, or work less overtime, or are less career-committed because they are especially dedicated to their children--such parents are put at a disadvantage. An increase in the exemption favors parents who both work outside the household, dedicating less time to their children but gaining a higher joint income-- which makes the exemption more valuable.

Clearly, something needs to be done. Economists have shown that families with children are carrying an ever-increasing tax burden. For example, a family of four at the median income in 1948 paid only 0.3% of its income in taxes, while in 1989 the same family paid 9.1%. If policy-makers are truly seeking a way to help families, they should put money back into parents’ pockets not through tax exemptions but through child allowances. Such allowances, common in Europe, do not discriminate between those who work at home and those who work outside the home; they provide a fixed amount, say, $600 per child, to all parents. (To reduce costs and enhance social justice, these monies are best treated as taxable income.)

What is at issue here is not the long-running debate over whether single parents can bring up a child properly, whether divorce hurts children more or less than “bad” marriages do, and certainly not whether women have a right to work outside the household. At issue is whether the government should enact public policies that discriminate against those who wish to maintain child-oriented families and reward those that have decided to be two-paycheck families for economic, careerist or other reasons.

The matter is of special concern for those of us who believe that American society made a mistake over the past generation as it in effect gave up on the family and supported the institutionalization of children, including very young infants, in child-care centers. Evidence is mounting that these centers are unable to provide the bonding that is essential for the proper development of personality, especially among children under two.

A growing body of data shows that institutionalized children are more inclined to under-perform in school, be poorly adjusted emotionally and engage in crime. In short, these children make poor future workers, citizens and fellow human beings. There is thus a strong public interest in encouraging mothers and fathers to dedicate more time to their children and in discouraging parents from institutionalizing their kids.

More than money is at stake. Studies show that the public sees changes in government policies as moral signals, indications of what the society considers proper conduct. For example, when laws were changed to allow “no-fault” divorce, it seemed the public saw more than a technical legal adjustment aimed at making divorce proceedings more honest and less litigious. The change was perceived as a sign that our society views divorce as without fault. Similarly, tax policies that reward those who spend less time with their children may well be understood to mean that the society sees nothing wrong with absentee parents.

One may argue that one modification in public policy is not enough to change the moral climate. The suggested tax-code amendment, however, is not an isolated measure. It follows others that penalize child-oriented families. Dr. Richard T. Gill, a Harvard economist, showed in a recent article in the Public Interest that the main thrust of the 1992 federal child-care legislation is to encourage child care outside the family; little would be done to help parents who wish to take care of their children themselves.

Granted, there is not much the government can or should do to restore families. Restoring family life can mainly be achieved through a change in our moral climate. The government, however, should not use its policies to undercut the family, but should signal that it, too, is aware of the changing moral climate. To be pro-family means encouraging the care of children, especially infants, at home.