Breastfeeding Tax Breaks: Bad Economics, Bad Policy

by JT McGee

The IRS is handing out a new tax break (not exactly a credit) for breast feeding mothers. Yep, you heard that right, the IRS wants to make sure that your children are getting ample time to breastfeed. Days after the IRS decision, many are calling it an excellent victory for public health. The first lady will give a speech today on this very topic.

But why? Well, according to new research, children who breastfeed are significantly less likely to become obese. And since we have that correlation, we apparently now have causation for obesity and generally poor health: not enough time with mom.

Other research suggests that the United States would save $13 Billion annually if 90% of new mothers were to breast feed their children for at least six months.

Why Breastfed Kids Are Healthier

I have my own explanation for the difference in health between kids that are breastfed for six months and those who aren’t breastfed:

  • Children who have been breastfeeding for at least six months are healthier because they have insanely “by-the-book” mothers.
  • A mom with that much time to breastfeed also has enough time and/or money to provide the best health care, or additional capacity to teach her children about healthy eating habits.

The study was not randomized, nor did it account for any differences in income between mothers. The study also failed to offset any health savings with the additional costs of breastfeeding. For the purposes of public policy and rational economics the study (it’s from Harvard, by the way) is worthless.

Of course, that also means it is perfect for government. And so it was, enjoy your new breastfeeding tax break. The tax benefit isn’t freestanding; it will be part of the existing itemized medical expenses credit, amid other changes to FSA programs.

However, such qualification also means that flexible spending account funds can be spent on breast feeding supplies. That means more money on breastfeeding, more money in corporate pockets. I wonder who chartered this study, after all.

{ 7 comments… read them below or add one }

Little House February 16, 2011 at 12:37

Moms also pass on their antibodies through their breast milk which means healthier babies; less ear infections and colds in those first few years. Also, think of all the money that is saved by not buying formula. Though the moms might need to spend more time with their babies, which might mean working part-time or staying home longer, they spend a lot less on formula and bottles.


JT McGee February 16, 2011 at 13:25

I’m not going to argue the science of it, mostly because it isn’t something in my circle of understanding and I have little interest in making an ass of myself in the area of science and health. Oh, and I haven’t ever breastfed anything, either. 😛

However, I do understand the basics of finding a good sample and making a logically consistent argument with data. This study is not at all something that we can declare to be logically consistent; it quantified only the benefits of a certain action, but did not consider the costs, nor did it compare the cost/benefit to the cost/benefit of other health services.

It didn’t even consider that people who breastfeed might have higher incomes, different genetics, or a better understanding of basic health than those who don’t. I mean, there are a million and a half different reasons why children who are breastfed are, on average, healthier. For the purposes of a proper study, I bet a positive correlation could be drawn between the number of months of breastfeeding and the likeliness a child makes routine checkups at the doctor.

I think it just goes to show why the tax code is so incredibly difficult to navigate; creating a new tax break is as easy as publishing a faulty study and calling it proof.


youngandthrifty February 17, 2011 at 02:32

When I read your post title in my CommentLuv, I did a double take 🙂

That’s a great example of how government reform and tax incentives can shape societal change towards a positive outcome.

Breastfeeding also likely helps the mother bond with her child (instead of plopping the child with a bottle to suck on), which leads to a plethora of healthy outcomes (self esteem etc.)


LaTisha @FSYAonline February 21, 2011 at 17:46

I think this is a good tax break. You never know who might have become president if they would have been breastfed just a little longer! But seriously, I think it’s a great incentive if it will actually make our children healthier.


JT McGee February 21, 2011 at 20:02

“But seriously, I think it’s a great incentive if it will actually make our children healthier.”

Me too. I just wish they’d prove it; they didn’t, and I’m thinking its because cost vs benefit, it isn’t actually a net gain.


Curious Cat Investing and Economics Blog March 5, 2011 at 07:06

It sounds like the government is just saying that breastfeeding expenses qualify for existing programs to help people manage health care costs. It seems reasonable to let those that expertise is with the science and health care matters make the decision on whether spending should be allowed using health care accounts. It seems more that there is a policy push to encourage breast feeding because the health care community has widespread agreement it is beneficial. The tax consequences are a minor point.


JT McGee March 5, 2011 at 07:57

I’m fine with allowing people experienced with X deal with X. Health professionals are fine to work on health care. What I’m not cool with is allowing health professionals to write tax policy; just because X is good with X doesn’t mean I value their opinion on Y.

I’m not sure how you begin to defend your view. How can we simply accept that because the benefits are there, that this makes good policy? How are we to know that a cost-savings in health care, for example, is not overridden by higher costs elsewhere? Again, the costs were not studied, only the savings.

With that view I can take the stance that cigarette smoking is good for the economy, since it would benefit small farmers. As for health care costs, I’ll ignore them, they apparently don’t matter, only benefits matter. So will you allow my smokers tax deduction to pass? It’s good economic policy! The benefits outweigh the untested costs!


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