Saving America (Part 3): Control for Me, Tax Credits for Thee
The Heritage Foundation Wants to Save America by Controlling Families
The Heritage Foundation understands that the government can’t force people into marriage or parenthood directly.
Instead, they propose using tax policy to financially reward people who conform to their preferred family structure, excluding everyone else. These policies are framed as support, but even for those who would qualify, they will not help families in a meaningful way. In part three of this series, let’s look at three specific policies they want to make law.
Last year, my husband and I spent more than $36,000 on daycare for our two kids (who are one and four). We live in a typical suburb (not a major city), and that price tag is the norm for most daycares in our area.
The Heritage Foundation is right that we have a crisis in America.
People who can and want to have children (or more children) are opting out or delaying for purely financial reasons. People who desperately want children but can only do so through IVF, surrogacy, or adoption can’t afford the cost.
And the declining birth rate is problematic, considering the systems we’ve built our society around rely on maintaining or growing the population. But Heritage’s proposed solution is to incentivize heterosexual marriage (specifically at a younger age) because that in and of itself will lead couples to have more children together.
Their position is: “The birthrate problem cannot and should not be addressed without tackling the marriage problem.”
However, even they admit that when policies like the ones they’re proposing have been implemented in other countries, it doesn’t work. In their Saving America report, they look to Hungary as an example, then conclude:
“Top demographers note that Hungary’s fertility uptick was driven primarily by timing changes (parents having babies sooner) rather than a large increase in lifetime family size, at least so far.”
“When looking to the country perhaps most famous for its pro-family and pro-marriage policies—Hungary—the answer is a modest bump (perhaps transient) when it comes to birth rate and much more encouraging results when it comes to marriage.”
Importantly, the government exists to protect individual rights and freedoms, maintain order, and promote the general welfare of the people it governs. We should not allow our government to limit everyone’s rights based on the ideology of some.
The Disproportionate Effect on Women
In the report, the authors work to keep their language gender neutral where they can, but it’s obvious these policies would disproportionately impact women.
The combination of earlier marriage, more children, and pushing women back into the home (creating financial dependence) certainly will not give women more freedom and control over their lives. It’s worth noting that the report doesn’t mention domestic violence or abuse a single time. That’s because the authors have a singular goal, without regard to the negative effects it might have on people (particularly women).
We often compare the cost of childcare to the mother’s income when determining whether it makes financial sense for one parent to leave their job. In the U.S., more than 80% of stay-at-home parents are women. When it comes down to it, mothers leave the paid workforce more often than fathers because they are almost always expected to be the primary caregiver.
Even when it’s purely a financial decision, there is still a gender element. As long as women are paid less than men, on average, it will “make sense financially” for women to offset the high cost of childcare by delaying or foregoing their own careers. Which, of course, creates a cycle of women continuing to earn less on average because they have delayed or foregone careers for a job that is extremely valuable but does not pay (motherhood).
Women who leave the workforce to care for their children experience lost wages, stalled careers, and reduced retirement savings. They’re also more vulnerable in relationships, with less power to leave unsafe or unequal situations. Not to mention, health insurance is often tied to employment, and the social safety net is weak, making this dependency even more dangerous.
You won’t find this in Heritage’s report, but our entire economy depends on the women who are quietly subsidizing it with unpaid, invisible labor. This allows their partner to work a job that brings in a paycheck, which they otherwise couldn’t do without paying for childcare. It’s almost always treated as a personal choice rather than the critical infrastructure it is.
The policy proposals in this report would only increase our dependency on women’s unpaid labor.
Three Policy Proposals
Tax credits that reward conformity while ignoring the actual, structural barriers to having children are tools of control, to the extent they have an effect at all. (Most people don’t tend to make life decisions based on tax credits like these.)
Here are the three specific tax policies Heritage’s report proposes and lays out in enough detail that any legislator could turn them into a bill.
(1) The Family and Marriage (FAM) Tax Credit
The FAM credit would be a $4,418 refundable tax credit for married joint filers who have a child, and where both the tax filing adults claiming the credit are the biological parents of that child. It would be available for up to four years and includes a 25% “large family bonus” for qualifying couples having their third child (or more).
The report goes on to list the “Relative Advantages” of this credit (these are word for word).
Encourages marriage.
Favors large families, but only with married parents.
Avoids new work disincentives and blunts existing ones.
Supports new families.
Frontloads benefits to the time that parents most need them.
The purpose of this tax credit is clear: to incentivize and reward marriage and biological children over other types of families with children.
(2) The Home Childcare Equalization (HCE) Credit
The authors claim, “when it comes to childcare and child well-being, there is no substitute for child-raising by a married biological mother and father.”
They criticize our current tax laws for subsidizing “out-of-home, marriage-agnostic, non-parental childcare, while not including or privileging at-home, married parent-provided childcare and child-raising.” In a plot twist, Heritage wants parents to have the freedom to choose whether to enter the workforce or stay home to raise their children.
Their proposed HCE credit would be available to the same people eligible for the FAM credit (married couples with biological children, with income limitations), and it provides $2,000 in subsidies per eligible child (under 5 years old) for parents who provide childcare at home.
If it were available to all parents, that would be great. But this credit would not duplicate the existing childcare credit that many already receive. So, for a family with two children under five (again, with married parents and biological children), instead of receiving $4,000 in childcare tax credits if your children are in daycare, you would receive the same $4,000 in tax credits if one parent provided at-home childcare to their children.
Other than the massive discrimination issue, we should give “stay-at-home” parents the same credits as we give to parents with children in daycare. But clearly, this is not enough money to affect people’s decision to enter the workforce or stay home, and wouldn’t it be easier to expand the current childcare tax credits instead of adding a new one?
Most families don’t choose out-of-home childcare because they prefer it. They choose it because they need to work in order to live.
This tax credit barely covers a single month of childcare, given the current rates. And it incentivizes women (because the vast majority of stay-at-home parents are women) leaving paid employment without providing any long-term economic protection.
(3) Newlywed Early Starter Trust (NEST) Accounts
Newlywed Early Starters Trust (NEST) accounts would be similar to the new “Trump accounts” for children, but they would be funded with $2,500 of taxpayer dollars upon the birth of a child where at least one parent is a U.S. citizen.
The money could only be withdrawn later, upon the beneficiary’s first marriage, between the ages of 18 and 30, and withdrawals would be spread out equally over three years. Any amount not withdrawn by age thirty would convert into a traditional IRA (with withdrawals currently allowed at age 59.5).
According to the authors, the goal of these accounts is to encourage early marriage and homeownership. They claim to want people to marry younger because it tends to lead to more children. That might be true, but at what cost to young people, and in particular, young women?
Too Little, Too Late, Too Exclusionary
A few thousand dollars in tax credits and small trust accounts that give money to people decades down the road don’t solve the structural affordability problems parents are facing right now.
New parents don’t just need a tax break next year. These credits barely cover the hospital bill. Parents need affordable childcare, healthcare, and housing, economic stability, and the freedom to make decisions about their lives. We all need those things, not just married biological parents.
The Heritage Foundation’s proposed policies don’t support all families by design. They reward people who conform to their narrow vision of what the American family should look like. But that’s not for Heritage or the government to decide. If we’re going to give parents tax breaks, they should apply to all parents who need them.
In a later part, I’ll break down some of the other policy proposals in their report, like marriage boot camps, flexible work arrangements, extending FLMA (unpaid and limited to breastfeeding mothers), eliminating the PLUS student loan, and many others. On a personal note, without the PLUS loan, I wouldn’t have my law degree. (Although I also wouldn’t have six-figure student loan debt. Have I mentioned how becoming a paid subscriber supports my work?)
What Real Support Looks Like
If parents are delaying children or having less children for financial reasons, tax credits are not enough to change that. But we can do much better than tax credits, and a few states are leading the way.
In 2022, New Mexico voters approved an amendment to permanently allocate a portion of the state’s funds to early childhood programs, generating hundreds of millions of dollars. The state now offers free childcare to most families (with some income limitations), while also raising wages for childcare workers and addressing supply-side issues. This approach reframes childcare as a public good (just like K–12 education) rather than a private family expense.
In 2023, Vermont passed Act 76, which established a 0.44% payroll tax, raising $125 million to fund childcare subsidies. It significantly increased the income threshold for assistance, with a sliding scale based on income so the lowest-income households don’t pay anything while higher-income families pay roughly 10% of their income.
Most recently, New York has invested in expanding subsidies and moving toward universal early education, particularly for younger children. In New York City, publicly funded universal Pre-K and 2-year-old care programs will provide free and low-cost early education, helping to alleviate the financial burden so many parents are facing.
These policies show a growing recognition among states that solving the childcare crisis requires public investment and systemic reform, not just temporary subsidies.
Heritage’s approach tries to control family behavior. These states’ policies are trying to make raising children easier, recognizing that childcare is an important part of our society’s infrastructure.
Support vs. Control
These tax credits are not enough to support families, and they are not enough to meaningfully increase the birth rate.
Their goal is to encourage earlier marriage, push people into boxes based on their beliefs about gender roles, and push Heritage’s specific vision of what a “natural family” should look like.
Instead of focusing on policies that support existing families, they are focused on producing more families of the kind they prefer. There are obvious policies we could implement to increase the birth rate and make life more affordable and stable for families.
It’s about control, not support.
Speaking of Support
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