Republican vice presidential nominee J.D. Vance has been in the news for an old clip of him talking about how the tax code should punish adults without kids. While Vance's proposal probably aims to address demographic concerns, it represents a misguided approach that contradicts fundamental principles of economic freedom and fairness.

And you know what? That's precisely what our tax code already does, in this case and many others.

Using the tax code to "reward" parents and "punish" nonparents is at odds with the idea of a neutral, efficient tax system. In an ideal and fair world, the tax base would be broad but taxed at a low rate. People making the same income should be paying the same level of taxes no matter how they choose to live their lives.

Unfortunately, the tax code is neither fair nor neutral. It punishes and rewards all sorts of behaviors based on what government officials decide is good or bad.

For instance, the tax code does, in fact, treat people with kids more favorably than it treats those who do not have kids.* There's the child tax credit, of course. Then there's the earned income tax credit, which is more generous for families with children than those without. And there is no shortage of other provisions, such as a very significant deduction for heads of households and another for dependent care, which do the same thing.

It's hard to know what Vance's proposal really entails. Does he want another surtax on childless parents? Does he want to expand the child tax credit and make it a universal basic income like many conservatives and progressives want? It's also unclear whether he is simply failing to see that our tax code already delivers on his wishes and punishes childless adults. Either way, I assume he is well intentioned and that he is rightfully concerned about the decline in fertility we are witnessing not just in this country but across the world.

Unfortunately, punishing childless parents with additional taxes wouldn't boost fertility. For one thing, we've had a child tax credit since the 1990s, and the tax break has been regularly extended. That hasn't encouraged people to have more kids.

That's not unique to the child tax credit. Lots of evidence exists showing that government programs of all sorts meant to encourage, reward, or stimulate the supply of babies usually fail. One of the most dramatic examples is South Korea. The country has spent over $200 billion on such policies over the past 16 years, and fertility rates are still falling.

There isn't any doubt that more people, and hence more babies, are a boon for our lives and our economy. But that alone isn't a good reason for government subsidies. And while raising kids is expensive, that's no justification for a government tax break, either.

Besides, careful studies have shown the cost of raising a child in America has been decreasing for six decades. In the end, rather than rewarding families with lesser taxes at the expense of childless adults, I would encourage advocates to focus on removing existing government barriers—like overzealous policies that make child care more expensive without making kids measurably safer—that make life more complicated for families.

Ultimately, these are only secondary aspects of a much bigger debate. Our tax code is incredibly unfair. It's not just childless adults that face a surcharge compared to parents. Tax breaks for homeowners mean that renters pay more money for the same amount of housing. Households which include a college student pay less in taxes. People who can afford an electric vehicle can secure a tax break that others cannot.

These tax breaks for some are not just unfair to the taxpayers who don't get them—they also turn our tax code into a complicated mess that requires many millions of collective hours to comply with. Instead of adding more complexity and bias, we should be moving in the opposite direction—toward a simpler, flatter, and more neutral code that treats all taxpayers equally.

Using the tax code as a tool for social engineering is misguided. It leads to economic inefficiencies and infringes on individual liberty. Rather than doubling down on the problematic aspects of our current system, we should be working toward comprehensive reform. Only then can we hope to see taxes as something that truly serves the interests of all Americans, regardless of their personal choices.

COPYRIGHT 2024 CREATORS.COM

*CORRECTION: The original version of this article misstated in part who benefits more from the current tax code.

The post J.D. Vance Wants To Control You With Taxes appeared first on Reason.com.

Get ready. The Supreme Court has agreed to hear former President Donald Trump's presidential immunity claim that he is protected from prosecution for his role in plotting to overturn the 2020 election results, and has set oral arguments for April. The Court's term ends in June, so hearing arguments in April means it is very likely a decision will be released before the justices leave.

"The justices scheduled arguments for the week of April 22 and said proceedings in the trial court would remain frozen, handing at least an interim victory to Mr. Trump," reported The New York Times. "His litigation strategy in all of the criminal prosecutions against him has consisted, in large part, of trying to slow things down."

If he does not have immunity, a criminal trial will follow, probably over the summer—during the height of election season.

Earlier this month, the Court also heard a case on whether states such as Colorado are within their rights to remove Trump from ballots—the 14th Amendment argument. It is expected to issue a ruling soon.

Surely this time will be different: If Congress can't pass appropriations bills to fund the government by midnight Friday, the federal government will enter a partial shutdown. House Speaker Mike Johnson (R–La.) is going for yet another stopgap bill to attempt to keep the government open, which "would extend funding for some government agencies for a week, through March 8, and the rest for another two weeks, until March 22," per The New York Times.

The caveat is that Congress would be expected to approve six of the 12 spending bills to fund the government for the next year, while buying a little more time for legislators to negotiate and pass the rest of the spending bills. Somewhat surprisingly, news broke last night that Johnson has managed to get a fair number of colleagues on board with the plan.

Still, it's a piecemeal solution that pleases practically nobody. The far-right flank of Republicans in the House continues to pursue deep spending cuts that neither Johnson nor Kevin McCarthy before him has managed to prioritize, as well as weaning Ukraine off U.S. government aid. Continuing resolutions—a.k.a. patchwork solutions that temporarily stave off government shutdowns but do not set any sort of long-term budget—were passed in September, November, and January. And Republicans have only a two-seat majority in the House, with quite a few of them riled up about the crisis at the southern border—which they keep saying must be secured, in order for other issues to be tackled—so there are few signs that Congress will get its act together anytime soon.

Are South Koreans having enough sex? Statistics Korea recently released data showing that the fertility rate declined by 8 percent in 2023 when compared with 2022. Normally, such a drop would not be greeted as catastrophic, except that this comes at a time when many developed countries have fertility rates in free-fall and South Korea already had the lowest fertility rate in the world. If current rates hold, the country's population (51 million at present) is predicted to halve by 2100.

"The average number of babies a South Korean woman is expected to give birth to during her life fell to 0.72 from 0.78 in 2022, and previous projections estimate that this will fall even further, to 0.68 in 2024," reported Al Jazeera. The replacement rate is 2.1 children. For comparison, the U.S. fertility rate has been hovering around 1.7, with a little dip in 2020 that has since recovered.

These new data, coupled with a BBC article that featured women across South Korea and their frustrations with their predicaments, has led to a robust debate among the punditry as to whether South Korea's aggressive pro-natalist policies were all for naught. ("Pro-natalist policies have a weak track record in every country where they've been tried," wrote Reason's Elizabeth Nolan Brown back in June 2023. "South Korea spent more than $200 billion subsidizing child care and parental leave over the past 16 years, President Yoon Suk Yeol said last fall. Yet the fertility rate fell from 1.1 in 2006 to 0.81 in 2021.")

Demographer Lyman Stone, meanwhile, called the BBC article "a demography reporting crime" and said that "South Korea spends less in government money per child than the OECD average" and that "much of the spending Korea claims it does never gets to families, but is actually a morass of local government subsidies, grants, and other intermediated forms of spending." When it does actually get to families, the fertility rate is positively affected, Stone argued.

But there are other factors, too: South Korea's graying population, for one—and how coughing up funds for retirees affects younger taxpayers' ability to save—as well as cultural influences, like the fact that one of Korea's biggest exports, K-pop stars, are generally forced by their agencies to abstain from dating (wouldn't want to destroy the fantasy, I guess). There are massive cultural expectation issues, too, like the fact that most South Koreans—nearly 80 percent!—send their kids to expensive private schools, so the cost of having a child is perceived to be extra high.

For more on this, watch Just Asking Questions with the Washington Examiner's Tim Carney (who has a new book out soon on precisely this subject): "Why aren't people having more kids?"

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Scenes from New York:

This woman used OMNY to pay for the bus. Once you hit 12 fares paid within a 7-day period, you get free rides. Cops boarded bus & forced riders to prove they'd paid didn't know how to handle this, threw her off, & hit her w a $100 ticket. Is this city a joke or what? pic.twitter.com/tD1fAvSnwL

— Liz Wolfe (@LizWolfeReason) February 28, 2024

Full article here, courtesy of Hell Gate.

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QUICK HITS

• "Google CEO Sundar Pichai addressed the company's Gemini controversy Tuesday evening, calling the AI app's problematic responses around race unacceptable and vowing to make structural changes to fix the problem," reported Semafor. The image generator Gemini seemed to have a recurring issue giving unrealistic and ahistorical interpretations of events—black Vikings, a lady pope, and nonwhite Founding Fathers, to name a few.
• California is so screwed:

California politics in a nutshell ???? pic.twitter.com/XE1XRzj7eh

— Alec Stapp (@AlecStapp) February 28, 2024

• Ukrainian President Volodymyr Zelenskyy is in Tirana, Albania, appealing to the Balkan nations for defense support.
• "Bitcoin rallied above $60,000 on Wednesday, riding its bullish momentum to its highest levels since November 2021, as more signs emerge that cryptocurrency's 'winter' has ended," reported Axios. For more on crypto winter, check out this joint from me and Zach Weissmueller:

• "Americans' satisfaction with personal life near record low," reported Gallup.
• The family of Russian dissident Alexei Navalny is having a hard time finding funeral homes and gravediggers to give Navalny a decent burial. Since his death two weeks ago, more than 400 people have reportedly been arrested for laying flowers in his memory, reported the BBC.
• On one hand, yes, this is an interesting and possibly good take. On the other, I don't think we should engage in any more elder abuse—working in government strikes me as the worst form of torture—and this man is 82. Let him spend the rest of his days eating ice cream cones!

Huge loss. If Democrats hated Mitch McConnell as GOP leader, wait til they see the ones who come next.

As for Republicans, well, this is good news only if you like how the GOP House functions & want more of that. McConnell has been GOPs most effective Congress leader in decades. https://t.co/JpqPy8brjN

— Brian Riedl ???? ???????? (@Brian_Riedl) February 28, 2024

• RIP Richard Lewis, my favorite Curb Your Enthusiasm character:

richard lewis & larry david back in the day pic.twitter.com/lxKoB0Lzzc

— Marlow Stern (@MarlowNYC) February 28, 2024

The post SCOTUS Takes on Trump appeared first on Reason.com.

America is celebrated for its economic dynamism and ample and generously paid employment opportunities. It's a nation that attracts immigrants from around the world. Yet Americans are bummed, and have been for a while. They believe that life was better 40 years ago. And maybe it was on some fronts, but not economically.

Surveys repeatedly demonstrate that Americans view today's economy in a negative light. Seventy-six percent believe the country is going in the wrong direction. Some polls even show that young people believe they'll be denied the American dream. Now, that might turn out to be true if Congress continues spending like drunken sailors. But it certainly isn't true based on a look back in time. By nearly all economic measures, we're doing much better today than we were in the 1970s and 1980s—a time most nostalgic people revere as a great era.

In a recent article, economist Jeremy Horpedahl looked at generational wealth (all assets minus all debt) and how today's young people are faring compared to previous generations. His findings are surprising. After all the talk about how Millennials are the poorest or unluckiest generation yet, Horpedahl's data show them with dramatically more wealth than Gen Xers had at the same age. And this wealth continues to grow.

What about income? A new paper by the American Enterprise Institute's Kevin Corinth and Federal Reserve Board's Jeff Larrimore looks at income levels by generation in a variety of ways. They find that each of the past four generations had higher inflation-adjusted incomes than did the previous generation. Further, they find that this trend doesn't seem to be driven by women entering the workforce.

That last part matters because if you listen to progressives and New Right conservatives, you might get a different story: that today's higher incomes are only due to the fact that both parents must now work in order for a family to afford a middle-class lifestyle. They claim that supporting a family of four on one income, like many people did back in the '70s and '80s, is now impossible. Believing this claim understandably bums people out.

But it's not true. One of its many problems, in addition to the data evidence provided by Corinth and Larrimore, is that it mistakenly implies that single-income households were the norm. In fact, as early as 1978, 50 percent of married couples were dual earners and just 25.6 percent relied only on a husband's income. I also assume that there are more dual-income earners now than there were in the '80s. While this may in fact be true for married couples (61 percent of married parents are now dual-earners), because marriage itself has declined, single-earner families have become relatively more common.

Maybe the overall morosity on the economy has to do with the perception that it's more expensive to raise a family these days than it used to be. Another report by Angela Rachidi looks at whether the decline in marriage, fertility, and the increase in out-of-wedlock childbirths are the result of economic hardship. She finds that contrary to the prevailing narrative, "household and family-level income show growth in recent decades after accounting for taxes and transfers." Not only that, but "the costs of raising a family—including housing, childcare, and higher education costs—have not grown so substantially over the past several decades that they indicate an affordability crisis."

So, what exactly is bumming people out? We may find an answer in the 1984 Ronald Reagan campaign ad commonly known as "Morning in America." It begins with serene images of an idyllic American landscape waking up to a new day. It features visuals of people going to work, flags waving in front of homes, and ordinary families in peaceful settings. The narrator speaks over these images, detailing improvements in the American condition over the past four years, including job creation, economic growth, and national pride.

I believe this feeling is what people are nostalgic about. It seems that they are nostalgic about a time when America was more united and it was clearer what being American meant. Never mind that this nostalgia is often based on an incomplete and idealized memory of an era that, like ours, was not perfect.

This is a serious challenge that we need to figure out how to address. One thing that won't help, though, is to erroneously claim that people were economically better off back then and call on government to fix an imaginary problem.

COPYRIGHT 2024 CREATORS.COM.

The post The Economy Is Doing Way Better Than Many Believe appeared first on Reason.com.

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