Issue 6 Taxes and welfare make a baby feb,11,2013

Before I start, I would like to apologize as I know I promised to post earlier, but I fell asleep. 

Any how, on to the topic.  Your probably curious as to the titile well here I go:

Taxes and Welfare make a Baby!?

            I’m sure all will agree that everyone hates paying taxes and that welfare is an unfortunate necessity.  What if the two were fused so as to eliminate much of the welfare bureaucracy and its costs while still providing benefits needed for our lowest income earners and the poor?  This is not a new concept for the Noble Prize winning economist Milton Freedmen had this idea in mind with his negative income tax.  I have my own idea however, which could be implemented with the existing tax code (with major alterations).  My idea is to implement a deduction in upwards of 10% to 20% for each “dependent” in your home.  For our purposes a dependant will be defined as any children living in your home under the age of 18, the elderly (age 65 and above), the mentally and physically disabled/challenged and college students who are living at home and their parents are paying for their education.  With this system, the tax credits, and welfare handouts for single parents, parents with disabled children and other similar programs would become largely redundant and can be altered or eliminated based on how well the deduction works.  The principle is simple, let people keep more of their own money so the government has to give them less or nothing at all.  Thus, the IRS becomes the new welfare office. 

            How this would work is simple.  The same way you file for deductions and tax credits every April 15 is the way you file for this deduction.  You simply register all the dependents living in your home and for that entire year and as long as you qualify, the amount of taxes you pay is slashed by 10 to 20% per dependent.  It will get people out of the welfare offices for they will no longer need to apply there.  I would even suggest adding pregnant women to the list of dependents under the expectation they are going to have the baby.

            Some are probably wondering, just how does this benefit us? What’s the point?  For one, it eliminates a bunch of people from having to receive traditional welfare, which is always a good thing.  My idea is plain and simple, if you’re just going to give that money back in the form of welfare then why not just let them keep the money.  It makes life so much simpler.  As to why I have the definition of dependents expanded in such a manner (usually its just children who are considered dependents) is to try and replace or in some cases reduce as many welfare programs as possible.

            There may be unintended consequences however.  Those consequences may possibly mean a family who normally would be forced to send grandma and grandpa to a nursing home may find it much better to keep our seniors at home (our grandparents could even register each other as dependents easing their tax burden).  Large families, who due to financial reasons would be forced to give up their children to foster care will no longer have to.  Grandparents who for whatever the circumstances are raising their grandkids would also get tax relief.  You’re beginning to see the benefits.

            These benefits of the unintended consequences are all possible, but they are not the ultimate solution to the welfare problem.  There will be cases when people will still need more money in the form of welfare due to their unique circumstances.  However, my idea tries to account for the majority and it is my hope that the States with their own income taxes, like my home State of New York, will copy this addition to the tax structure.  As to those leftover who still need more money, they can be accommodated by customized tax rebates.  This again will turn our tax collectors into our welfare office.  You apply for the deduction and if you qualify for a “supplemental rebate” you will get a check from the IRS with the money you need to supplement your personal income to care for your “dependents.”  As a result many welfare programs at the Federal level (and the State and Local level if replicated there) can be abolished.  This is beneficial for now we will no longer need to accommodate a welfare bureaucracy.  This program will not eliminate unemployment or food stamps which could be used to fill in the gaps that the new deductions are unable to account for. 

            Some may be questioning if this deduction will apply to the rich (obviously they could never get the rebate).  My answer is 'yes' for the following reasons.  There are children out there without parents and the rich can easily accommodate a multitude of them if they were to adopt.  In other words, orphans will have a home and a good education.  Some may think this is a terrible idea, children will be used to save money (our seniors too).  Well to counter that, there is already a system in place to prevent any abuse which is America’s adoption systems.  These systems look to ensure the welfare of the children being adopted go to good homes with decent families.  So there is a countermeasure in place already.  Look at Angelina Jolie, she’s adopted a bunch, and Congresswoman Michele Bachmann raised 23 foster children, who knows how many more will get a chance to have a warm loving family due to raising children becoming more affordable.

            It is important to understand that all other tax credits and deductions of the tax system must largely disappear.  There may be a few exceptions like charity, and State and Local taxes, but the rest will have to go.  Why?  It comes down to priorities.  Are your priorities tax revenue and providing tax credits and deductions for whatever you can think of, or is it tax revenue and protecting our low income earners.  Providing tax credits to mohair farmers or for buying golf carts (this is a form of corporatism) goes against the tax welfare fusion for it would cause the country to falter financially, (and we should not be sending our tax dollars to the government to have them help people buy golf carts).  As to those tax credits and deductions that should remain State and Local tax deductions are a must, but so is charity.  America is the most charitable country in the world and those charities help the poor in ways welfare can’t, for traditional welfare is nothing but a blanket approach and is usually too clunky.  This really leaves only three pieces to the tax system, a deduction for dependents, one for non-federal taxes and one for charitable donations.

            Right now there are approximately over 900 Federal welfare (anti-poverty, low income assistance, school lunch programs) programs.  There are no limits placed on how many of these programs you can apply for and thus there are some people who live fairly well off on the current system.  My idea seeks to rid us of as many of these programs as possible with all its fraud, waste and abuse included by simply letting them keep more of their own money.  Let’s save time, effort and money by bringing our tax system and welfare system together to make a baby.

The idea is: if you're just going to give a person back the same money you took from them in taxes, then why take it from them in the first place.  Hope you enjoyed my little post (wink).