Raising children is an expensive undertaking, with some
estimates putting the total cost of raising a child at $300,000
or more. But a controversial proposal that would give parents tax
breaks at the expense of those who choose not to have children
has sparked intense debate about the role of the tax laws in
providing financial support to families with children.
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, takes a critical look at the
proposal. Dan notes that the argument in favor of the proposal is
that raising kids involves extra expenses that non-parents don't
have to pay, and so making non-parents who earn above the median
household income pay more in taxes essentially makes economic
prospects more even. Yet Dan points out that past attempts to
provide tax subsidies to encourage certain activities hasn't
always worked out well, noting the role of tax incentives in the
savings and loan crisis of the late 1970s and 1980s. Even today,
tax-favored vehicles have come under fire, with
Kinder Morgan Energy Partners
and similar master limited partnerships,
and other real-estate investment trusts, and
and its business development company peers being seen by some as
tax-motivated enterprises that have resulted in overinvestment in
their respective areas. Dan concludes that with tax incentives
for families already in place, further moves would make the
decision to have a family too economically motivated.
Take advantage of this little-known
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