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January 19, 2007
Child Support
Jamie Whyte is at it again, stirring things up:
In this respect there is nothing special about bankruptcy. Compulsory insurance always causes such perversions. Consider the risky business of reproducing. This increases your family’s running costs. If you lose your job, having children will exacerbate the pain. To protect people against this misfortune, the Government guarantees unemployed parents a certain income. And it funds this protection through taxation.
Yet the tax we pay is not correlated to our chance of becoming unemployed. Quite the reverse. So this insurance is a good deal for those with a high chance of unemployment and a bad deal for everyone else. It creates a cross-subsidy that perverts the “allocation of reproduction”, away from those with a reliable income and the virtues that go with it, and towards those with characteristics conducive of unemployment, such as indolence and stupidity. The cost of this cross-subsidy is not only the growing number of children raised by single parents: up from 6 per cent in 1970 to 24 per cent today. It is also the reduced fertility of responsible couples.
Labour and Conservative governments over the past century have constructed a comprehensive system of compulsory “social insurance”, covering every misfortune that may befall us, from having children we cannot afford to retiring with no savings. The system, they explain, is required by “social justice”, “compassionate conservatism” or some other moral imperative. But subsidising degeneracy by taxing the Protestant virtues is a strange way of promoting morality.
There is of course another possible answer: having children is simply a lifestyle choice, one that should no more be subsidized than choosing an expensive sofa. Move to a citizen's basic income, one without any additions for perpetuating your genes down the generations (which is, after all, in a Darwinian sense, winning the game anyway) and we rid ourselves of this moral hazard.
January 19, 2007 in Your Tax Money at Work | Permalink
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Comments
The problem - doubtless one that even Mr Whyte would recognise were he not trolling - is that it's appallingly unjust to punish children for the sins of their parents.
This means that "subsidising degeneracy" is the only moral choice available to us, and so railing against it doesn't really help.
Posted by: john b | Jan 19, 2007 11:02:56 AM
I like the idea of a citizens basic income, but one thought troubles me. The only two places I can think of that have tried it are (a) Ancient Rome and (b) Saudi Arabia. In both cases it seems to have made society much more unstable.
Posted by: Kay Tie | Jan 19, 2007 11:58:23 AM
john b,
we shouldn't let parents "take their own children hostage" (i.e. if you don't pay em i have these people).
We should know by now that paying ransoms doesn't make them stop.
Posted by: AntiCitizenOne | Jan 19, 2007 12:50:04 PM
The problem - doubtless one that even Mr Whyte would recognise were he not trolling - is that it's appallingly unjust to punish children for the sins of their parents.
In what way would stopping the process of forcing people to subsidise others families constitute punishment?
Do these children have a god given right to the welfare they receive. If so could you tell us at what level it is ordained to be.
Posted by: Serf | Jan 19, 2007 1:59:47 PM
Does anyone take Whyte seriously? His sound bite is funny, and a model for any aspiring columnists.
'But subsidising degeneracy by taxing the Protestant virtues is a strange way of promoting morality'
Posted by: james C | Jan 19, 2007 2:04:04 PM
Kay Tie. Citizen's Income is somehow seen as a bit left field. Actually it's not. Of 60 million people in this country, nearly half are entitled to some benefits or other (child benefit or old age stuff or unemployment stuff) and the other half are taxpayers (you can take the value of the miserly personal allowance for tax as a proxy for the Citizen's Income). When you've ground the figures, the only people who are neither taxpayers nor benefit claimants are married mothers and students, a couple of million people tops. All a Citizen's Income would do is to iron out the wrinkles.
Posted by: Mark Wadsworth | Jan 19, 2007 4:51:07 PM
In what way would stopping the process of forcing people to subsidise others families constitute punishment?
Are you planning on continuing to have old people subsidized by taxes on those working? If so, then those large families end up subsidizing those without children later by additional payments into National Insurance. So it works both ways, and the direction of the ultimate subsidy (from a lineage point of view) is difficult.
Move to a citizen's basic income, one without any additions for perpetuating your genes down the generations (which is, after all, in a Darwinian sense, winning the game anyway) and we rid ourselves of this moral hazard.
And yet there's a moral hazard anyway because that "citizen's basic income" has to be paid for. Having children costs people money. In the past, that money was recouped because the children would support their parents in their dotage. Moving to a citizen's basic income would reinforce the already prevalent idea that the state, not the children, are responsible for supporting the aged. Hence children no longer are economically reasonable to have, but are beneficial for society in the long run thanks to how retirement works.
If the earning power later in life of children is to be nationalized and used to support the "citizen's basic income" of all the non-working elderly, then the cost of raising such a child should be subsidized somewhat as well in order to maintain the socially optimal amount of children.
Of course, is one assuming that the newly born children would not be eligible for the citizen's basic income or not? If eligible, that would be another way to address the issue.
Posted by: John Thacker | Jan 19, 2007 6:10:03 PM
