Call it what you want, but April 15th 1987 is a day that should be in the back of everyone’s minds as a watershed event in American history.
Because, on the night of April 15th 1987, a total of 7 million children disappeared from the United States. Thankfully, some of these children (Approximately 2 million) later were ‘found’, and all contribute to one of the more unique cases of American history, but also a major lesson in Economics.
So, what caused 5+ million children to disappear? Well, president Reagan happened. Source
Prior to 1987, oddly enough it was possible to claim as many dependents as you wanted on your taxes. Since there was a child tax credit for every additional dependent in your household, it was quite easy to just put the names down of additional, non-existent children for your family and get glorious government money.
Reagan though, in 1986 decided that rather than let people claim taxes on the honor system, part of the change in tax policy would require entry of Social Security numbers for all household members. This was all due to take effect by tax season 1987.
Once 1987 rolled around, a grand total of 7 million children disappeared from tax roles.
Eventually 2 million wound back up as dependents, as many parents never asked for Social Security numbers be issued for their kids. So for 1988 the number dropped from a total of 7 million missing children to 5 million. One of the major morals of the story would be to remember that people love to cheat on taxes. And in this case, it wasn’t the rich or even the 1% that were hosing tax payers, it was normal, every-day families.
Another fun fact was that in 1989 the US government went a little further, and started checking into child daycare credits. This year, not just children had disappeared into thin air, but 2.6 million babysitters also vanished as well. A total savings of $1.2 billion dollars, all taken once again not by the 1% but ordinary, average people wanting to cheat on their taxes.