Child Support Enforement

WM Work Welfare: Strengthening the Child Support Enforcement Program: Status, Challenges, and Opportunities for Modernization, January 21, 2026

The only thing worse than ineffective child support enforcement is when the system works. When an associate of mine was going through the process, there was every incentive to hold back on salary increases to avoid a higher payment, as the amount left to him under current guidelines provides a meager existence to the donor parent.

In my case, no child support was necessary or possible, as I was not working. Rather I was receiving Social Security Disability Insurance, which provided my daughter with a monthly payment, alleviating my need to provide income. Of course, this was also a disincentive to return to the workforce, had I been able to.

These cases show what, in economics, is called Government Failure and Market Failure. Government failure is a system that provides incentives to game it while also providing an inadequate benefit to those in need. Government failure is a circumstance where the free market also provides an inadequate solution to the needs of society. In this case, the needs of children to have an adequate income.

I have described the government failure in the current system. It can be remedied with a vastly different system, one which asks nothing from divorced fathers, which I will describe below.

When the demand for a family  income is impossible to meet in the economy, the market has failed. Employers who would do the right thing are put at a disadvantage because they have higher labor costs while those who would discharge or simply refuse to hire fathers and mothers with children - or simply provide an inadequate wage to them. The former is often the reason for middle aged workers to be replaced by lower wage, especially H-1B, workers in many industries, while the latter explains why lower wage workers live in precarity and require government assistance - which is scant at current levels (more government failure) and disincentivizes work.

The answer reflects what was provided to my daughter when she was a minor child, but in a way that does not discourage work or face the gaze of public or private social service bureaucrats.

We have provided this solution previously - a fully refundable child tax credit of a wage equal to what Social Security provides to dependents - be they survivors or the disabled - but doing so with wages rather than only through transfer payments. This also ends the need for child support for all but those who are wealthy. The mechanism for this is to impose a subtraction value added (net business receipts) tax on employers with a credit for providing the same level of assistance to families that Social Security provides now - assistance which is higher than the pandemic era child tax credit provided through the Internal Revenue Service.

The increased Child Credit caused Senator Manchin to oppose making the credit permanent because it carried the stink of welfare. Adding the credit to wages and having employers distribute it removes that implication.  This payment also encourages work, as it does not go away when a parent returns to work. It also ends the need for most payments to file taxes at all (allowing for the repeal of the Earned Income Tax Credit). 

Attachment: Consumption Taxes