This wishy-washy attitude toward the credit, unfortunately, leaves them looking narrowly at political constraints rather than the real economic opportunity that this credit provides. With some moderate adjustments in the design of the credit, a significant reduction could be made in the ranks of children without health insurance. This type of redesign would represent a leap beyond the very high work and marriage penalties associated with our welfare system and the expansion of those penalties currently being proposed in many of the health reforms for children. In terms of sheer politics, there are almost no losers relative to current law. Taxpayers with children get a tax break.
Liberals get a substantial reduction in children uncovered by health insurance.
Conservatives create a viable alternative to government-controlled health insurance and eliminate some of the capricious tax rates hidden in welfare programs and in existing health insurance expansion proposals. Meanwhile, the proposal is creative in dealing with the very real revenue constraint that both sides face in trying to draft a total tax bill. The proposal isn't perfect. Some special consideration ideally would be given to those who fall between the cracks of the tax and welfare systems. Any new program or procedure, moreover, is going to involve some administrative costs.