Question

How did your tax liability change when you had a child? Why do you think the tax policies do this? (6 points: 3 for correctly finding the change in liability, 3 for a plausible reason for the change)

Answer 1

When I had a child, my tax liability was reduced, which meant that I had a lower obligation in terms of cash to pay annually. This is so because, by having a child, it is presumed that higher consumption will be generated within the household, which will generate higher income through taxes for the state and the federal government. Thus, consumption compensates for the direct taxes that the government stops collecting from the citizen.