Study: Higher Taxes Lead to Better Quality of Life for Children

Alyssa Meza Jan 21, 2012

A child’s well-being is strongly related to his or her state’s tax rate, according to a new report from the Foundation for Child Development (FCD).

The study, “Investing In Public Programs Matters: How State Policies Impact Children’s Lives,” was based on findings from the STATE Child Well-Being Index (CWI) which determines child quality of life by measuring economic well-being, health, safety, community engagement and other factors, and then comparing them state-by-state.

The study found that states with higher tax rates generate more revenue, which means more money for social services for children and thus greater quality of life.  States with higher taxes invest more money in public pre-school and kindergarten, spend more money per child in elementary and secondary schools, allow greater numbers of children to enroll in Medicaid and pay higher Temporary Assistance for Needy Families (TANF) benefits. States with a tax rate around 10 percent had the highest childhood well being ranking. 

Because of these factors, the health and happiness of a child is often dependent on where he or she lives. New Jersey ranked highest in childhood well-being with a CWI of 0.85, followed by Massachusetts, New Hampshire and Utah. States in the south and southwest had the lowest ranking.  New Mexico was last with a CWI of -0.96.  The states with the highest CWI ranking had the highest reading scores and highest percentage of children with health insurance.  “Less than 10 percent of the federal budget is invested in children’s programs,” said Ruby Takanishi, president of FCD.  Therefore, state and local policies, services and funding have a huge impact.

In a Pew Hispanic Center report from September, childhood poverty among Hispanics was at a record high, coinciding with the first time in U.S. history that the largest group of children in poverty was not white. According to the report, 6.1 million Hispanic children, 5 million white children and 4.4 million black children were living below the poverty line in 2010.

While the report's findings may seem painfully obvious, political careers are made and broken on tax policy, and supporting higher taxes to finance vital social programs is increasingly untenable–especially for budget-strapped state governments.  

“Although states are currently revenue-starved, this is exactly the wrong time to reduce taxes,” Takanishi said in a press release announcing the study's findings. “The revenues generated by taxes should be used to invest more in the education and health of our children. Policymakers must recognize that the cost of shortchanging children today is too high a price to pay in the future.”

This article was originally published by In These Times.

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