Allan Carlson calls it "the demographic paradox of the welfare state": Entitlement programs depend for their financing on a growing population, but suppress fertility rates

Allan Carlson calls it "the demographic paradox of the welfare state": Entitlement programs depend for their financing on a growing population, but suppress fertility rates. In this country, for example, Social Security and Medicare are structured in a way that imposes an implicit tax on parents.

They have to pay heavy payroll taxes into the system at the same time they are paying the costs of raising children (including income forgone). Ramesh Ponnuru has argued in these pages that tax reform should include an expanded tax credit for children to offset this "family tax." Economist Stephen Entin, writing in the Wall Street Journal, disagrees. He wants to cut tax rates on work, saving, and investment. We agree. But raising children is, in part, an investment in the future: the biggest investment a lot of people make. When it comes to children, too many of our free-market friends have an economic, and political, blind spot.

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