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What about those who choose to have one parent stay home? If there's a deduction for child care, I think my wife forgoing a career should result in us taking he

What about those who choose to have one parent stay home? If there's a deduction for child care, I think my wife forgoing a career should result in us taking her expected salary as a deduction.

sentenza 13y ago
Your wife forgoing her career hurts the overall productivity of the economy. Why should this be subsidized?
- phamilton 13y ago
  That could be said about any do-it-yourself endeavor. Making my own food is subsidized (no sales tax) when eating out is better for the productivity of the economy, for example.
  - rayiner 13y ago
    You're hitting on an important theoretical point with regards to income taxes, which is that do it yourself work is effectively subsidized because the fair market value isn't imputed for taxation purposes. Imputing taxes is a can of worms, but it doesn't help your position. If such taxes existed, you'd be taxed on the fair market value of the child care duties performed by your wife.
    - phamilton 13y ago
      Interesting. I think I understand a bit better now after thinking through the following hypothetical: I decide to swap kids with a neighbor during the day. My wife watches their kids, they watch our kids. We pay each other 40k a year to do so. I would then be able to deduct the 40k as a child care expense, but I would also have 40k additional income. The net result on taxable income would be zero. In a lot of ways, that makes perfect sense.
rayiner 13y ago
A deduction is a tax accounting device intended to distinguish income from revenue. In your hypothetical, why is any deduction necessary to properly compute income? The fact that couples choose to have two spouses work is irrelevant. Daycare has no consumptive value either way. A company can choose to hire a separate CTO instead of combining the role into another position. They are entitled to deduct his salary anyway, and companies that don't hire a separate CTO can't complain about not getting a deduction too.

What about those who choose to have one parent stay home? If there's a deduction for child care, I think my wife forgoing a career should result in us taking her expected salary as a deduction.

sentenza 13y ago

Your wife forgoing her career hurts the overall productivity of the economy. Why should this be subsidized?

phamilton 13y ago
That could be said about any do-it-yourself endeavor. Making my own food is subsidized (no sales tax) when eating out is better for the productivity of the economy, for example.
- rayiner 13y ago
  You're hitting on an important theoretical point with regards to income taxes, which is that do it yourself work is effectively subsidized because the fair market value isn't imputed for taxation purposes. Imputing taxes is a can of worms, but it doesn't help your position. If such taxes existed, you'd be taxed on the fair market value of the child care duties performed by your wife.
  - phamilton 13y ago
    Interesting. I think I understand a bit better now after thinking through the following hypothetical: I decide to swap kids with a neighbor during the day. My wife watches their kids, they watch our kids. We pay each other 40k a year to do so. I would then be able to deduct the 40k as a child care expense, but I would also have 40k additional income. The net result on taxable income would be zero. In a lot of ways, that makes perfect sense.

rayiner 13y ago

A deduction is a tax accounting device intended to distinguish income from revenue. In your hypothetical, why is any deduction necessary to properly compute income? The fact that couples choose to have two spouses work is irrelevant. Daycare has no consumptive value either way. A company can choose to hire a separate CTO instead of combining the role into another position. They are entitled to deduct his salary anyway, and companies that don't hire a separate CTO can't complain about not getting a deduction too.