Tax Notes

Effects on Recent Fiscal Policies on Today's Children and Future Generations

Abstract

Recent and proposed fiscal policies—the tax cuts, proposals to make them permanent, and the medicare prescription drug bill—will hurt economic prospects for most of today's children and all future generations. The programs will leave economic growth largely unchanged, but will redistribute resources from future to current generations and, within each generation, from low- and middle-income families toward an affluent minority. These effects exacerbate the impact of underlying federal budget trends and processes that will place significant, imminent pressure on funding for children's programs. An expanded program of investments in children is both feasible and desirable.

Introduction

Today's children represent the future of the country. The notion that children and future generations should have better living standards than current generations is central to universally shared views of economic progress.