If your kid is kidnapped you should get a break…
The original topic about stolen property is the patch for the same kind of loophole. Without this rule, you could arrange to have something of value stolen in order to avoid a taxable transaction. Imagine your employer giving a bonus by leaving an envelope of cash conspicuously unguarded.
This is the kind of unhinged batshit economic thinking that leads to people dying because they can’t afford insulin.
So, first, the "cobra effect," like most economic proverbs, is apocryphal. It didn't happen. It's a story economists tell their kids to keep them from sharing.
Second, there's a big damn difference between "I'm going to grow a snake because I'm getting paid for it" and "I'm going to get my kids kidnapped so I can collect a tax credit without actually having to pay for the kids." It may not appear that way if one's working model of people is "dispassionate rational actor," but it turns out in the real world most people have some kind of irrational emotional attachment to their kids.
Finally, I'd submit that "Cobra Effect"-type problems arise as a factor of two errors - the first is misunderstanding the cultural group for which you're designing practices, and the second is a weirdly inflexible view of society that accepts someone manipulating the system as just a sort of thing that happens and not an egregious breach of the social contract warranting a response.
Don’t assume that everyone else subscribes to your morality, ideology or “ethics”. It’s a brutal world out there and some people value power much more than you do.
Health care for profit rewards companies who limit supply, increase prices, and set the goal of having long-term “customers” because each of those things brings in more cash.
It’s not economic thinking that’s driving the ship though.
People dying because they can't afford insulin are usually not dying because they have insurance where the prescription co-pays for insulin is too high, but because they either are actually uninsured, are effectively uninsured because of a high deductible, or have insurance that works on a coinsurance rather than co-payment model.
And even then that's usually not really the problem, the problem is usually that they can't afford a more basic life necessity (often food or shelter) for themselves or their dependents, and voluntarily forego (or limit use of) insulin to afford the other need. Which is a real problem (and a real public economic policy problem), but usually not fundamentally a healthcare policy problem.
(On the other hand, it's often a problem where moral hazard arguments of the type at issue here contribute to the failure to solve, so the argument about that being the problem may still be correct by a less direct route then seems to have been intended.)
Some tangential articles to show that people exploit children for money. https://www.newyorker.com/magazine/2021/10/25/how-an-adoptio... https://www.npr.org/2019/10/09/768533784/arizona-official-ar...
Since Veblen goods are defined as anything where the demand curve slopes upward, that would only be a result of an empirical study if the study was designed to test, and strong enough to confidently disprove, the existence of goods with a flat demand curve. But it's not meaningful in any case.
> Veblen goods, which kidnapped children most certainly are not.
[citation needed]
Look at the other things that are Veblen goods. They are status symbols. Handbags, rare cars, etc. Kidnapped children are clearly not a member of this category.
> [citation needed]
Please. This is a ludicrous demand for rigor, and not how science actually works.
Captives and slaves, which kidnapped children are the first and often also the second, can be either tools or status symbols (or both simultaneously).
Obviously, flagrantly illegal (and not wink-wink-nudge-nudge tolerated in public) goods tend to only be status symbols in particular criminal subcultures, but those subcultures very much exist.
Yes, that's true. But that's the wrong side of the transaction. This IRS policy is disincentivizing false kidnapping. Not actual kidnapping.
The IRS policy is designed to prevent you from claiming a child as a dependent indefinitely after they have been kidnapped. So, for this to be a Veblen good, it'd have to be a status symbol in your social circle to have had a child kidnapped from you.
There's no reward, you'd be getting the same tax break if the child was not kidnapped. The rule is about how long it takes to lose the tax break in case of kidnapping.
Except if the kid was not kidnapped, you have to pay for the kid's expenses and welfare.
I expect somebody who wants to keep the tax break without the kid is not too worried about the kid's intrinsic welfare.
Who would even agree to kidnap somebody else’s child for this purpose? I’d suspect the first 9 out of 10 convicted felons would still tell the police your plans. Most people would be too suspicious that you’re trying to entrap them, asking them to kidnap your child.
And what can you offer someone to agree to do this if your own reward is a temporary tax break? At this point, you might as well kidnap your own child.
Using a corner case of behavior to justify systemic suppression of otherwise rational behavior just perpetuates the cycle of pain. Welfare royalty exist. But not nearly in numbers high enough to ethically justify hamstringing the system.
If they exist, it's nowhere near the levels portrayed in popular media.
So, part of the problem is where people choose to draw the line on "royalty". If refrigerator ownership meet your criteria then sure, you're going to see royalty everywhere.
I’ve yet to hear an explicitly stated argument for why I’m supposed to think someone who has access to a refrigerator, internet, food, etc. is impoverished, except for, “Somesuch CEO earns 100000000x more than they do.”
That said, sure, “welfare royalty” seems like a misnomer. I assume they typically live like regular, “middle-class” people without the job part.
Maybe we are talking about "welfare" in different ways? In the US, welfare is a constellation of programs, not just one single program that gives $$ each week/month. Everything from subsidized school lunches, medicaid (CHIP for additional care for children), SNAP... your comment about "without the job part" indicates that you might not be aware that a very large number of people are on one or more of these programs and work fulltime+ jobs. Where I live it was a real crisis during COVID school closures because the poorest children had parents with jobs that could not be done remotely and parents could not find or afford alternatives, at the same time that any internet they had was through cell phones (usually the parents phones) so the school district needed to send out wifi hotspots & chromebooks so that students at least had the basic tools to learn... but had to be left alone (if they were old enough) or parents quit their already low-paying jobs to watch over their kids.
None of the above sounds like middle-class without the job part. As you began your comment: I hear people bring up your sort of argument to scoff at the idea that significant % of the population may fall through the cracks or just get left behind. I don't understand the point of view except as lack of direct experience with people living in these not-middle-class positions of poverty on the brink of collapse.
A lack of agency and security. Often their situation is such that they cannot change it. For the employed, there is no time or energy to improve life. For the unemployed, employment often has a negative net income (once accounting for transport costs, reduction in benefits and costs they can currently pay with time such as food prep which would have to be paid in money).
There are no spare resources for education or entrepreneurship. No resources for fulfilling hobbies or self development.
Even if you accept the negatives for long term growth, getting an entry level job from that position requires grovelling and outright lying to your 'betters' about how you want to dedicate your life to breaking your back stacking shelves for $8/hr on a split shift 100% availability basis (that doesn't give you enough time to get home in your 3hr 'break') because you love it so much.
Then there's the precarity that poverty brings. Not knowing how you'll afford an emergency, and constantly weighing eating vs. paying the power is mentally draining and incredibly harmful to your mental health. Not conceding to your landlord's insane demands could leave you permanently homeless, and now debt collectors are calling you for a bill you have receipts of paying every 3 hours.
A car is unaffordable, public transit is underfunded, demeaning and unreliable, and pedestrian or cycling infrastructure is unaffordable.
No level of government will listen to your concerns, in fact their decisions are actually anticorrelated with public support.
On top of that you are constantly told that everything wrong is your fault, and you just have to drink fewer lattes and vote with your wallet more.
Public space is stolen and turned into space for cars or privately owned malls.
Anything your community does build for mutual benefit is torn down and rebuild to be extractive.
This is not the life of nobility. It's basically just the same as a peasant with easier access to propaganda, protein, calories, and mentally destructive dopamine buttons.
In many ways it is worse because it is so isolating, and the source of the harm is so nebulous.
Many people are way more against crimes which offer them little returns than against crimes that may happen in their social circles.
Edit: I want to clarify that it's not some kind of conspiracy, it's that we simply are more empathic with people in a similar position to us
you already have a tax break for the kid, it's a dependent, all that was being said if your kid gets kidnapped you can still claim it as a dependent for half a year and the commenter thought it would be reasonable to allow longer.
The people applying the tax code can make exceptions at their discretion. It's a difference.
Presumably the rule is there to subsidize child-rearing. When the child is gone (kidnapping, death, ascention to heaven, etc), the law would logically not apply any more, so there will be details about where the cuttoff falls. If people wanted want to give cash to unfortunate parents, judges interpreting the laws should tell you to pass another law for it.