In a March blog entry, Nancy Folbre, UMass Amherst economics professor and NY Times Economix blog contributor, analyzes taxes paid and benefits received between parents and non-parents. Overall, non-parents pay more in net taxes than parents, until you calculate the future tax contributions on their children.
Let’s put this in more personal terms.
Prof. Douglas Wolf of Syracuse University, the first author of this paper, is a parent. I am not. Over my lifetime I am likely to pay more in taxes relative to the benefits I receive than he does.
But since he has devoted substantial resources to raising children, he has indirectly generated the net taxes they will pay in the future.
He has doubtless derived considerable satisfaction from his commitment to his children, which was not influenced by his calculation of possible “fiscal externalities” or benefits to other taxpayers.
But his commitment benefits me, because his children — whom I’ve never met — will help pay for the public transfers and services I anticipate receiving in my old age.