Josh Barro, an opinion writer for the New York Times writes:
When we hire people to come into our homes to do these things, the labor is counted as part of the economy and subject to tax. If I pay you to watch my child and you pay me to watch your child, we both owe income tax. If you and I each watch our own children, the I.R.S. collects nothing — even though we have done substantially the same work for the same benefit. This tax preference for housework over paid work creates a significant distortion: Some people (mostly women) choose to stay home when, absent tax considerations, they might work outside the home instead.
This is in regards to President Obama’s speech about the proposed tax credit for working families for up to $3000. Conservatives have criticized the plan because the tax credit would not apply to families where one spouse is a stay at home parent.
In Josh’s bizarro world, because the other parent is not working, the government is unable to collect the taxes and so, by default, that is a tax credit. He expands on that to suggest that there are larger implications because the stay at home parent might do home repairs, remodels, and other work that could go to contractors, depriving the IRS, and the Government out of revenues.
Let me see if I understand this: If you want to be a stay at home parent to raise your kid, this is a tax credit, but also a detriment to the economy because the stay at home parent is not generating income that could be used to pay for other services?
Barro Economics? More like Bozo economics.