Read this commentary by Josh Barro at the New York Times, as he instructs us to view stay-at-home parents as tax cheats, because the work they do for themselves doesn’t involve the sort of financial transaction the State can take a piece of:
President Obama’s proposal to expand a tax break for working parents with children under 5 has some conservatives criticizing it for discriminating against stay-at-home parents.
Those parents wouldn’t be able to take the proposed tax credit equal to 50 percent of child care expenses, up to a maximum of $3,000 per child. What the critics fail to see is that the playing field wasn’t level to begin with. The tax code is already hugely distorted in favor of stay-at-home parenting: Labor outside the home is taxed; household work, such as stay-at-home parenting, is not.
I realize that sounds like a bizarre thing to say. Why would there be a tax on parenting, and why would the lack of such a tax constitute a tax preference? But productive activities within the home are not especially different from the taxable work we do outside the home. We labor, and instead of receiving a cash wage, we receive something else we value: a clean house or a mowed lawn or a well-behaved child. In 1973, the economist John Kendrick estimated that unmeasured and untaxed household activities like child rearing amounted to about a quarter of the size of the whole economy as measured by gross national product.
When we hire people to come into our homes to do these things, the labor is counted as part of the economy and subject to tax. If I pay you to watch my child and you pay me to watch your child, we both owe income tax. If you and I each watch our own children, the I.R.S. collects nothing — even though we have done substantially the same work for the same benefit. This tax preference for housework over paid work creates a significant distortion: Some people (mostly women) choose to stay home when, absent tax considerations, they might work outside the home instead.
The above commentary is from the central thought publisher of the establishment.
Now read this: