The same reason you probably pay a much lower rate than Bill Gates. Kids cost money, lots of it, to care for.Originally Posted by sirpoopsalot
[econ lesson] This has to do with what's called "diminishing margianal returns" ie. a decrease in the "goodness" you get from each increment of something, in this case a buck.
Things like candy bars are usually used as an example; the first candy bar tastes really good, and the second is very nice, but if you had to sit down and eat 20, #6 won't taste as good as #1 and by the time you got to #20, you might be feeling sick (thus the "goodness" went from positive, to negative.) A poor starving college student who won a pizza party would flip. He would get much more good from the $15 of free pizza than Bill Gates would.
Now, how's that work with money you ask? Well, any currency is just a repesentative of the goods you can buy, and at a certian point, you can't really buy anymore. If a CEO making 6 figures got an extra $1000 dollars, he might spend it on a hot tub remote control so he doesn't have to wait for it to start up when he get home (yes, BG already has this luxury); wearas a poor farmer having trouble making his morgage would use it on his shelter (a basic need). [/econ lesson]
You'd get the same deduction if you were caring for an incapasicated parent or other person over whom you had leagal gaurdianship. So to debunk myth #1: you don't pay less taxes because you bore a child, you pay less taxes becuase your usable income is lower.
(sorry H A) Myth #2: property tax is the only way to pay for state funded edu. The US federal government gives money to states earmarked for education. This is the reason that states have to pay attention to the government when it comes to things like "No Child Left Behind". Read the Constitution and you'll find that the feds have no control over education (or the highway system) directly. They control the standards (like speed limit in the 80s) by giving or withholding money. Otherwise some states could never afford it (Mississippi comes to mind) and others would have too much to know what to do with it (that is actually a problem Nevada had to face in the last session of legistator here.)
@ NSX; educating the populace is what allows the economy to grow.see here under returns to eduction and technology.Countries that invest the most in education also tend to be the richest and have the highest rates of growth of per capita output. Note the growth rate effect: not only are countries with more education richer, they also seem to grow faster.
You can't work if no one can afford what you you produce, and they can't make something to sell to you if they don't know how.
And if you think the US (or Quebec) is bad, look at Sweden. One year Ingreid Bergman paid 102% of her yearly income in taxes.