ABSTRACT
The American experience points to the pitfalls and promise of a pro-family income tax scheme. Mandatory school attendance laws, child labour statutes, and state old-age pensions funded through taxation all represent, from the perspective of the family, the socializing of children's time and insurance value. In an era where every modern nation has either a zero-growth or a negative total fertility rate, the birth of additional children should be welcomed and encouraged by a tax system. One countervailing development was the creation of the Earned Income Tax Credit (EITC) in 1975, a modest income supplement made available to low-income families with at least one dependent child at home. It is important to note that the EITC was conceived as a tax rebate to the working poor with children: its maximum benefit level was initially keyed to the combined total payroll tax rate.
