Legendary investor Charlie Munger was famous for saying, “Show me the incentive and I’ll show you the outcome.” This is especially relevant with the complicated American tax code. Ronald Reagan understood this and in his farewell address highlighting the successful tax reduction policies of his administration, stated, “Common sense told us that when you put a big tax on something, the people will produce less of it. So, we cut the people’s tax rates, and the people produced more than ever before.”
This maxim is true when it comes to family policy. America, like the rest of the world, is experiencing a declining birth rate. Though we are in better shape than our peer nations, it is still a problematic trend. In 2024, the United States had a record low number of children born to women of childbearing age, and surveys show women are now consistently having fewer children than they would like to have. Large demographic trends cannot easily be altered, but we should look for opportunities to incentivize starting or growing a family.
To begin, lawmakers should look for better ways to support parents and reduce their burdens, especially at key moments in family life. One such policy to provide more economic security for working parents was just introduced by Congressman David Valadao (R-Calif.), head of the Republican Governance Group caucus, and Blake Moore (R-Utah), a member of House Republican leadership, in introducing the bipartisan Supporting Newborn Parents Act of 2026.
This piece of legislation is aimed directly at the financial costs associated with childbirth, when parents cut back on working hours to prioritize bonding with their baby even as new expenses like diapers and hospital bills hit their pocketbooks. The bill allows parents to claim a $2,000 refundable tax credit for a newborn, which is structured so parents can claim it soon after childbirth, rather than waiting until tax time.
According to one survey, a family’s household income drops 10% during the first year of a child’s life. If passed, this new bill could alleviate some of the burden, especially for single-earner married households or moms physically recovering from a challenging pregnancy and delivery.
According to policy analyst and pro-life advocate Leah Sargeant, many of the pro-family supports existing in the current tax code are helpful but don’t provide fast relief for parents when a baby is born. The recently expanded Child Tax Credit provides relief specifically in tax season, while the newly created Trump Accounts set the stage for wealth building for children as they become adults. This new idea would complement these existing conservative policy achievements with more immediate help for parents in the first year of a newborn’s life.
Click Here to Read More (Originally Published at World Magazine)
Daniel is the director of the Land Center for Cultural Engagement at Southwestern Baptist Theological Seminary. He is the author of several books, including The Dignity Revolution, Agents of Grace, and his forthcoming book, In Defense of Christian Patriotism. Dan is a graduate of Southern Baptist Theological Seminary. He and his wife, Angela, have four children.
