Wednesday, March 5, 2008

A tax credit for fetuses

Various fiscal measures help parents with raising their children, typically through tax deductions, child care credits, education credits or child allowances. The goal is to increase fertility or simply help parents. The Liberal Party of Quebec, currently forming a minority government in the province, is thinking aloud about extending tax credits to fetuses of 20 weeks or more.

This is not as silly as it seems. After all, various social programmes are already in place to benefit pregnant women. For example, the WIC programme in the United States provides cheques to lower income women (either pregnant or with young children) to encourage them to buy healthy food. Other countries provide for maternity leave that can extend substantially into the pregnancy.

The innovation in Quebec would be simply extend the benefits for children to the latter stages of a first pregnancy. This would allow households to acquire the necessary goods for the baby before birth, something that may matter for cash constrained households. The credit would depend on household income and be paid out monthly. The pregnancy needs to be certified by a physician, thus encouraging women to be followed medically.

4 comments:

VIlfredo said...

Quebec has its fair share of failed policy experiments, but for once this is one that makes sense. You want to make sure future mothers are followed by a doctor, and this gives the financial incentives to do so. A mother with fewer (financial) worries will give birth to a better baby.

The only drawback is that it gives poor households more of an incentive to procreate, and given educational and other outcomes of their offspring, these are not the ones ones you want to encourage.

Anonymous said...

How did you find that out? I had to search deep to find the quote, and it is only available in French: Go to http://www.plq.org/congres/fr/,
click on "Famille", then "Rapport du comite", it is point 3. on page 14. Talk about burried.

AlabamaFor You said...

But they are still going to allow abortions, right? How does that make sense?

VIlfredo said...

alabamafor you: Abortions are before 20 weeks. Once you keep the baby, the money is yours...