Politicians promise families tax cuts. Inflation keeps undoing them.

A “growing bipartisan consensus” holds that government policy needs to be easier on families, according to the New York Times. One Republican official told the New Yorker that his party is making “the family turn” in economics. Last year’s presidential race saw “each party trying to one-up the other on its family friendliness,” concluded CNN.

While Democrats have long favored economic support for families, conservatives concerned about declining birth rates have increasingly come around to the same view. The “pronatalist” right, a movement that includes Vice President JD Vance, is now “closer to the center of power than ever before,” the Times reports.

Great news. Meanwhile, the tax code keeps getting less pro-family.

Tax benefits for parents have been shrinking for most of the 2000s. They are smaller than they were seven years ago, during Donald Trump’s first term. They’re smaller, too, than they were 20 years ago, during George W. Bush’s presidency.

This trend runs directly counter to one of the main arguments that the libertarian opponents of these benefits make: that they create a large middle-class constituency that, over time, inevitably demands more and more support, enlarging an “insatiable entitlement state.”

The actual historical pattern is for child benefits in the United States to erode for long periods of time as a result of inflation and for policymakers to intervene only occasionally to restore them.

For many decades, the principal benefit for children in the tax code was the dependent exemption. It was put in place less because Americans wanted higher birth rates because they thought that families should have at least enough tax-free income to pay the basic cost of providing for children. In the 1940s, at the start of the baby boom, the exemption was set at $600. Each child wiped out $132 of the median household’s tax liability, or in today’s dollars, around $1,770.

But inflation and changes in tax brackets reduced that value over time. By 1995, the exemption was worth $860 per child in today’s dollars. That decline led to a bipartisan push to introduce a tax credit for children. A Republican Congress enacted a $500 credit in 1997, and President Bill Clinton signed it into law. Bush subsequently expanded it to $1,000. By 2004, the combined value of the exemption and the credit meant that each child reduced a middle-income family’s tax liability by $2,510, again in current dollars.

Inflation then resumed eating away at this value until, in 2017, a Republican Congress and Trump decided to double the child credit to $2,000 per child – but abolish the exemption altogether. For a brief moment, the value of the benefit was at $2,560 in today’s dollars. Then, President Joe Biden signed a COVID-relief bill that temporarily enlarged the credit even more (and, controversially, weakened the requirement that recipients work). But the Biden expansion expired, and the last few years of high inflation have eliminated more than one-fifth of the credit’s value. Many provisions of the tax code change automatically in response to inflation. Policymakers have deliberately chosen not to protect the child credit from inflation, presumably because they don’t want to make the extra room that such a move would require in the federal budget.

Even the inflation-adjusted numbers arguably understate how much the economic value of child benefits has declined. Under the Truman-era dependent exemption, the tax benefit for each child amounted to 4 % of the median household’s income. It’s now down to 2.4 %. To the extent that pro-family policies are meant to reduce the opportunity costs of having children, that’s probably the number to keep in mind.

The historical trends don’t, of course, settle questions about what Congress should do today. Restoring the child credit to the level of the first Trump term, and protecting it from future inflation, would reduce revenue at a time when we already have large deficits. That restoration is also competing with other tax-cut proposals: In addition to pursuing a permanent extension of his 2017 tax cuts, Trump is pushing Congress to exempt tips and Social Security benefits from taxation.

But the history should put the current debate in context. Tax breaks for parents are not growing uncontrollably. Our society might be growing more anxious about falling birth rates, but that sentiment has not yet moved us to make drastic changes to the federal budget. You might like the idea of an unprecedented experiment in using government policy to raise birth rates, or fear it: Either way, it does not appear to be on the verge of happening.

Parents, and especially parents of large families, are paying a larger share of the federal tax burden than they were two decades ago. As Republicans try to rewrite the tax code this year, the question to ask is not whether they have become a working-class party willing to go further than ever before to help families. It’s whether they’re going to be stingier with families than their Bush-era predecessors were.

Ramesh Ponnuru, a contributing columnist for the Washington Post, is the editor of National Review and a fellow at the American Enterprise Institute.