CHICAGO, April 15 /PRNewswire-USNewswire/ -- Americans tend to think we
are better off than families in most other industrial countries because we
pay lower income taxes. But when we factor in the higher amount Americans
pay for health care, child care, and education, the comparison is not
always in our favor. Where do American families' tax dollars go and what
family "value" they get in return?
For every $100 in income tax:
-- $32 goes to national defense
-- $19 goes to interest on the national debt
-- $15 goes to supplemental programs such as TANF, child tax credits,
and farm subsidies
-- $14 goes to health
-- $6 goes to education, employment, and social services
-- $4 goes to transportation
-- $2 goes to administration of justice
-- $2 goes to environment and natural resources
-- $2 goes to international affairs
-- $1 goes to community and regional development
-- $1 goes to agriculture
-- $1 goes to science, space, and technology
-- $1 goes to the commerce and housing fund
FEDERAL PROGRAMS AND TAX INCENTIVES FOR FAMILIES:
-- U.S. parents can reduce their tax burdens by claiming dependents,
which results in a $3,100 reduction in taxable income. For a married couple
filing jointly with a $50,000 income, this is worth a maximum of $510 per
child per year, or $1020 for a family with two children. The child tax
credit also gives families a maximum of $1,000 tax credit for each child,
bringing the benefit up to $1,510 for a one-child family in that tax
bracket.
On the other hand, the average household pays more than $2300 a year
for health insurance and medical care -- and risks being liable for much
more should a family member face a catastrophic illness.
-- The child and dependent care tax credit allows families to credit a
percentage of their childcare expenses. The credit is a percentage of child
care costs, up to a maximum of $3,000 for one child or $6,000 for two or
more children. Taxpayers with earned incomes over $43,000 will receive 20%
of that amount, and the percentage increases as earned income decreases.
The maximum credit a couple making $50,000 can receive is $1,200. But for
families who purchase child care, this makes only a small dent in the
$7,300 average day care bill for one child each year.
- Tax credits are also available for higher education expenses. The
Hope Credit is worth up to $1650 per tax year for up to two years per
student. The Lifetime Learning Credit allows up to $2000 credit per return.
-- In 2007, legislators voted to increase individual Pell Grant amounts
to a new maximum is $4,310. This will be increased to $5,400 in 2012-13.
This may sound like an impressive increase. But in 1980, the Pell Grant
covered 99% of the average cost of tuition, fees, AND room and board at a
four-year public college. Today, the Pell Grant does not even cover the
full cost of tuition and fees at such a college.
-- Thus, even at their height, the financial benefits of the last
decade's tax cuts for middle class families never equaled the financial
benefits that citizens of many other countries receive in the form of
monthly child allowances, universal health care, subsidized parental leaves
and child care, and college assistance:
-- Poor families get some extra help. The Earned Income Tax Credit is a
refundable tax credit. If the family does not have enough income to benefit
from the credit, they get the same amount as a cash return. The EITC
maximum for a worker with one child is $2,853, and the maximum for more
than one child is $4,176. The credit is probably the most effective
anti-poverty program in America, lifting many poor working families above
the poverty line.
-- Impoverished families also receive modest monthly payments out of
the TANF program, are eligible for Medicaid and food stamps, and may be
able to participate in Head Start pre-school programs, which are funded
under education.
-- And wealthy families also get some extra help. All homeowner
families benefit from the mortgage deduction for interest payments on home
loans, but this disproportionately benefits upper-income families. Half of
all tax subsidies for homeownership go to the wealthiest 3.2 percent of
households.
SO HOW DO WE COMPARE TO OTHER COUNTRIES?
-- In most of Western Europe, citizens enjoy the right to
near-universal health care. They do not have to forego routine care for
financial reasons, and are not financially wiped out by catastrophic health
emergencies. In America, this occurs frequently enough that one-quarter of
financial bankruptcies originate in medical problems not covered by
insurance.
-- Families in Europe generally pay far less in college expenses than
do most American families.
In Sweden, students are not charged for tuition. In the United Kingdom,
tuition is 3145 pounds Sterling ($6234). Thanks to subsidies, it is free
for those households making less than 32,690 pounds ($64,798). Meanwhile,
students in households making between 32,690 pounds ($64,798) and 60,004
pounds ($118, 940) receive a stipend worth up to 1574 pounds ($3120), based
on income.
-- Every other industrial nation in Western Europe, and most of the
rest of the world as well, provides paid maternity leave, and in some cases
paid paternity leave as well.
Canada offers Employment Insurance for both maternity and paternity
leave, allowing a couple to take up to 50 weeks leave, which can be divided
between mother and father, at 55 percent of pay, up to a maximum of $435
per week. In addition, Canada's Universal Child Care Benefit pays families
$100 per month for each child under age six.
In Germany women get 6 weeks paid leave before the birth of a child and
8 weeks afterward. Either the mother or father is guaranteed up to three
years unpaid but job-protected leave for child care.
In Norway, parental leave allowance is 54 weeks at 80% pay or 44 weeks
at 100%. The mother must take three weeks before birth and six weeks
immediately after if she intends to use any leave. The father must take
five weeks off if he wants to participate in the share. Other than that,
the parents can share the time off any way they wish. Adoptive parents are
eligible for 51 weeks off at 80% pay or 41 weeks at 100%.
In Greece, either parent can use up to 17 months of leave time, and
receive an additional hour off per day until the child is 30 months old, or
two hours per day for 12 months and one hour per day for the next six
months.
In Belgium, free early childhood education is available to all children
starting at the age of 2 1/2.
For more information on U.S. welfare policies, contact Professor Andrew
Cherlin, Johns Hopkins University, 410-516-2370. E-mail: cherlin@jhu.edu
For international comparisons of family policies, contact Jane
Waldfogel, Professor of Social Work and Public Affairs at Columbia
University and Research Associate at the London School of Economics,
jw205@columbia.edu, 212-851-2408.
For information on tax subsidies, contact Roberta Iversen,, Associate
Professor, School of Social Policy & Practice, University of Pennsylvania:
215.898.5529, Email: riversen@sp2.upenn.edu.
On U.S. family policies, contact Professor Nancy Folbre, Professor of
Economics, University of Massachusetts Amherst: 413-545-3283,
folbre@econs.umass.edu
The Council on Contemporary Families, based at the University of
Illinois at Chicago, is a non-profit, non-partisan association of prominent
family researchers and clinicians whose aim is to make accessible to the
press and public recent research on family formation, marriage, divorce,
childhood and family diversity. To receive periodic briefing papers and
fact sheets, contact Stephanie Coontz, Director of Research and Public
Education coontzs@msn.com.
MARK YOUR CALENDARS FOR CCF'S 11th ANNUAL CONFERENCE, APRIL 25-26.
"Family Issues in Contention," at the University of Illinois, Chicago
features:
-- A panel on the "hooking-up" patterns of today's youth, with new
research and commentators from diverse perspectives on the impact of these
practices.
-- Another workshop on the controversial question, "Is Transracial and
Transnational Adoption the Right Policy for Parents? Children? Society?"
-- Still another panel of demographers and clinical psychologists
examines whether cohabitation is "good" for love or for marriage.
-- And the latest thoughts of researchers and clinicians on whether
unhappy couples should divorce of "stick it out."
SOURCE Council on Contemporary Families
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Related links:
http://www.contemporaryfamilies.org
CONTACT:
Stephanie Coontz of the Council on
Contemporary Families, +1-360-352-8117, coontzs@msn.com
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