Should Child Support Be Deductible (and Taxed)?

Oh my. This one’s going to generate some conversation. I’m innocently scanning law review articles yesterday and I come across this one from Reginald Mombrun at the Florida A&M University College of Law in Orlando, An End to the Deadbeat Dad Dilemma? – Puncturing the Paradigm by Allowing a Deduction for Child Support Payments, 13 Fordham J. Corp. & Fin. L. 211 (2008).

Mombrun, who has moved since writing the article and now teaches at North Carolina Central University School of Law, says that an estimated 75% to 87% of children in single parent households receive no financial support from their non-custodial parent, and he calls failure to pay child support “one of the most pervasive acts of civil disobedience since prohibition and the anti-drug laws.” There are two narratives about child support, he says, that routinely clash with each other. There’s the “deadbeat dad” myth about fathers driving luxury cars and taking expensive trips with their girlfriends or new wives while their children starve, and there’s the “child support queen” myth about dead broke dads eating crackers and cheese under bare bulbs so mothers can live a life of leisure. And I would add, although Mombrun doesn’t, that the new wives and girlfriends of non-custodial dads are often mistrustful and disdainful of mothers and resentful of any money paid to them.

Mombrun says the current system of child support enforcement uses no carrots, only sticks, and he makes the argument that in many ways deadbeat dads are created by the system rather than being the reason the system exists. He says that about 2/3 of non-custodial fathers simply can’t afford to pay child support and that the current system tends to drive fathers into the underground economy and discourage them from remarrying. He also says, and this is a surprise to me, that the current system of child support collection costs more than the value of the child support collected. I may look at that issue separately in a later note.

The solution, according to Mombrun, should have three parts. We should make child support awards more “realistic” (presumably meaning smaller). We should make child support payments deductible to the non-custodial parent and taxable to the custodial parent. And we should continue present collection efforts.

Mombrun doesn’t say this, but the most important result of implementing his proposal would be a massive transfer of wealth from custodial parents to non-custodial parents. He also doesn’t say this, but if one acts at the same time both to make child support awards smaller and to make them deductible and taxable, one is rejecting the economic studies each state conducts as part of its creation of child support guidelines. I can’t speak for every state, but I know in Alabama this process took years and involved careful analysis by economists of what it takes for a single parent with children to live, together with what a single parent without children can afford to pay. Mombrun ignores these studies, presumably judging them so flawed as to be irrelevant.