Sunday, July 17, 2011

The Financial Impact of Federal Policy on Families

There is a lot of concern, and rightly so, about the looming financial crisis surrounding the raising of our national debt limit. Both democrats and republicans have dug in for a fight and are risking a default by our government for the first time in history. This will have a devastating impact if it is allowed to happen.
As much as I am concerned about this current crisis, I have been concerned for a long time about the financial impact of our federal government on marriage and family. Here are three areas that are big on my radar screen. And they are so big because they are all areas where our federal government has a negative financial impact.
First, the failure of our government to keep up with the child deduction. This has fallen further and further behind and has a big impact on families. When first enacted back in the 1950’s, it was designed to lesson the tax burden on families who are raising children. But congress has failed to raise it sufficiently to keep up with inflation. If they had, what is a $2000 deduction today would be much higher, over $8000. Imagine the benefit to families who now often need both parents to work to pay their bills. How many mothers would rather be at home instead of placing their children in day care?
Second, the impact of the marriage penalty. The way our over complicated tax law is written, a couple who are married and file jointly pay more taxes than a couple who are not married but living together. The family is the foundation of any society, and yet we make it harder for couples who want to be married. So what if people simply live together? There are many negative outcomes for a couple who chose to live together, including a higher rate of break up if they stay unmarried, and a higher rate of divorce if they do eventually marry. Our government should be doing everything it can to strengthen marriage and family, not undermining it through the tax code.
Third, school choice. By any measure you can think of, our public schools are doing a poor job when compared to other industrialized nations. We spend more money per student than any time in our nation’s history, and yet our schools are not keeping up with the rest of the world. In this global economy, parents should have the opportunity to send their children to the best school possible, public, private, or religious. We are a free, capitalist society and that allows for one of the greatest incentives to do better ever devised, competition. If schools and teachers were forced to compete, I can guarantee that their performance would improve, and as a result of that, the education that our students receive. This is an issue that our federal government can and should address.
Am I concerned about the looming federal debt crisis, you bet, and I have called my representative and senators about it. You can be sure this will have a very negative impact on your family if it isn’t resolved now: higher costs, higher interest rates, more difficulty obtaining credit, etc. But what concerns me just as much, if not more, is the negative financial impact of a government that is increasing undermining the support for marriage and family.
Blessings,
Dr. Paul