What are Kids Worth?

by Amelia Tyagi

For all you working parents out there: Which is more important, the quality of your kids’ daycare or the quality of your office Christmas party? Which takes a bigger toll on your productivity, a babysitter who doesn’t show up or the company’s broken cappuccino machine?

In short, which matters more…the kids or the perks?

When you look at the way the IRS treats those things, it’s not the kids.

If you own a business, the IRS lets you deduct a lot more for the Christmas parties and cappuccino machines than for paying a babysitter to take care of your kids.

It’s easy to measure. For a typical middle class family with one kid, you can deduct just 20% of your child care expenses, up to a total of 600 dollars a year. In case you don’t like doing math in your head, here’s the translation: that’s less than 2 dollars a day.

I can’t even get someone to walk my dog for that amount, and my dog doesn’t even bite; I wish I could say the same for my two-year-old. In our house, we used up our entire year’s worth of child care deduction by the middle of February.

So what happens if you’re crazy enough to have more than one kid? You get another 600 bucks a year in deductions for the second kid. But that’s the limit. According to the tax code, kid 3 has to babysit him or herself. There’s no more help from the feds.

Businesses, on the other hand, get to deduct pretty much everything, from corporate jets to cell phones to the cappuccino machines and company cars.

Someone should remind Congress that there are 48 million working parents out there. With child care costs rising at three times the rate of inflation, we could use some help -- certainly more than $2 a day.

For a little help with my daycare bill--like a fair tax break--I’d gladly pay for the cappuccino machine out of my own pocket. Heck, might even go to the office Christmas party.