Viktor Orban is famous for, among many other things, his government's focus on family policies. Critics counter that his policies have failed to appreciably lift the birth rate; advocates reply that he has arrested its decline and that if you look at more relevant metrics, his policies are actually working.

In any case, he has announced a slew of new pro-family policies, and they are worth paying attention to. The announcement comes as Hungary is in "pre-election mode" with parliamentary elections due in Spring 2026. Both Viktor Orban and the leader of the opposition Peter Magyar holding major rallies, and polls showing them neck-and-neck.

Framed as “Europe’s largest tax cut program” and a bid to establish the “world’s first family-centered economy,” these measures represent unprecedented fiscal incentives for family formation and natality. The key measures are:

Mothers with one child receive full personal income tax (PIT) exemption until age 30.

Mothers with two children gain phased PIT exemptions starting January 2026, transitioning to full lifetime exemptions by 2029.

Mothers with three children achieve immediate PIT exemption from October 2025 onward.

This builds upon Hungary’s existing 2019 policy granting lifetime PIT exemptions to mothers of four or more children. Young adults already benefit from PIT exemptions until age 24; mothers now extend this through age 30 (for one child) or indefinitely (for two or more). The government estimates over one million families will qualify, and estimates the cost of the policy at 2.5% of GDP per year.

Interestingly—unlike CTC or even child allowance proposals on this side of the Atlantic—Orban's policies focus on working mothers, though to be fair Hungary does have other natalist policies that apply regardless of whether or not mothers work. Importantly, in Hungary, people file taxes as individuals, not as households, so this is not like France's "parts fiscales" system where one individual's exemption benefits the whole household. If you're a stay-at-home Mom, Orban's tax cuts do not benefit you.

Why is this? You'd have to ask him, but it's easy to speculate. This is an election-season proposal, and we suspect that stay-at-home moms are already in the bag for Orban while working moms may be more of a swing constituency. And there are obviously economic factors at play: taking women out of the workforce would not be good for the economy, at least in the short run, and subsidizing stay-at-home moms would have a high fiscal cost. It must be noted that inflation in Hungary (which does not have the euro) is high, running around 15% this year, so Orban's fiscal margins of manoeuvre are small.

It's an interesting policy proposal nonetheless, different from what we see in the US. Our instinct is to prefer transfers like the CTC which help stay-at-home moms and (especially) moms who may currently work but would like to spend more time with their kids without being financially penalized. But perhaps this approach is too idealistic? Orban's approach seems to accept a reality which social conservatives don't like but which is likely to remain reality for the foreseeable future, namely that two-earner households are the default for most families with kids.

Policy News You Need To Know

#DemsInDisarray #ShutdownPolitics — As you know, we don't like to discuss politics very much here, unless it has an impact on policy. And this seems to be one of those times. Punchbowl is reporting on the internal meltdown of Congressional Democrats over Senator Schumer's decision to allow the CR to come to a vote and refuse to shut down the government. "In an extraordinary press conference on Friday, Jeffries refused multiple times to say whether he has confidence in Schumer." The reason why this is noteworthy and policy-related is that, for as long as your correspondent remembers, Republicans have been the side of shutting down the government, and Democrats have been the side of keeping the government open. We are saying this in a non-judgmental way on either side. Back in the long-ago days of the Tea Party era, your correspondent supported several government shutdowns (though we also learned from that experience). Democrats were also the more disciplined party, more able to keep their extreme (again, non-judgementally) wings in line. We watched a complete reversal of that script yesterday. In spite of some screeching the Republicans passed the CR with time to spare and only one dissenting vote, with a strong assist from President Trump, Vice President Vance, and the House Freedom Caucus. Meanwhile the Democrats hemmed and hawed until the last minute. These are the two reasons why historically Democrats have been the party of keeping government open: ideological, obviously (and one should not discount ideology too much), and party discipline. Parties that have received a significant national electoral blow tend to react in two ways. They can either, as it were, fold in on themselves, on their base, and become more extreme, or they can move to the center. House Democrats, at the very least, seem to be choosing option A. This could have significant impact on policy (for example, reconciliation will have to pass on a party-line vote).

#MakeTheDemsGreatAgain — Speaking of: if you are at all into this stuff (and presumably if you are reading this you are), you will know that California Gavin Newsom has started a podcast where he interviews right-wing personalities. Yes, he's running, and he clearly feels the need to tack center-wide. Which is why this is interesting: Capitol Weekly, a California politics site, surveyed 1000 California voters on Newsom's podcast, and also had a focus group watch it. The response from Democrats was overwhelmingly negative. After viewing the podcast, his favorability among Liberals declined from 46% to 30%. Focus group responses are notoriously easy to game, and Capitol Weekly is clearly a left-leaning website, so take it with a grain of salt, but: "After this clip we asked voters 'Do you believe by praising Charlie Kirk that he is showing a bipartisanship or openness to other political ideas?' The response was very negative, with only one-quarter of voters agreeing. Even among Democrats, who had the best response toward Newsom, only 40% agreed and 60% disagreed." Smart Democrats want to pull the party to the center but it seems that, right now, actual Democrats are saying "Non, merci."

#TheEconomy — As we enter what we've decided to call the maybecession—there are a lot of signs pointing to a recession underneath topline signs that seem to show economic health—it's worth reading this item by Douglas Holtz-Eakin on declining consumer sentiment.

#Housing — One of the most interesting ideas we've heard recently on housing regulation has to do with minimum lot sizes. The idea is that because minimum lot sizes are so high, developers can only afford to build McMansions OR apartment complexes. Small lot sizes mean you can build small single-family homes, ie starter homes, which is what young families need, and young families particularly need help today. Jason Sorens at The Daily Economy makes exactly this argument.

#Academia — The great Henry Olsen at National Review with the case for taxing the Ivies.

#Ed — Re: the "dismantling" of the Department of Education, AEI's Rick Hess, who is always worth reading, makes a very important point: cutting staff alone doesn't fix the biggest problems with Ed, which are federal control and red tape.

#Energy — Here is R Street's Michael Giberon making the case for dynamic pricing for utilities. The argument for is that (like all prices in a marketplace) price changes allows customers to change their behavior in response to constrains in supply. The argument against is that it's not nice (and would be unpopular) to stick families with large unexpected utility bill price increases because of the vagaries of global commodities markets.

#Tax — When it comes to the tax bill, there's some discussion about SALT. But did you know about C-SALT? Turns out corporations also get an exemption from SALT. Unlike SALT, C-SALT was untouched by TCJA. Here is Arnold Ventures' Scott Hodge arguing that capping C-SALT, as part of an overall pro-growth tax package, would be a good tradeoff in order to make the bill fiscally responsible.

#Reg — We enjoy "This Week in Regulation," by Dan Goldbeck of American Action Forum. This week's item finds that the "first real costs" of the new Administration have come in, in the form of immigration-related rules. "Last Wednesday, DHS published an interim final rule (IFR) regarding “Alien Registration Form and Evidence of Registration.” The rule “amends DHS regulations to designate a new registration form for aliens to comply with statutory alien registration and fingerprinting provisions.” Per the rule’s Paperwork Reduction Act analysis, this new form would add an annual paperwork burden of 2,576,000 hours with an associated annual “opportunity cost” to those filing this paperwork of roughly $118 million (or $355 million total across the three-year window in which paperwork requirements are officially valid)."

#Reg — Speaking of, but on the other hand, EPA just announced "over 30 deregulatory actions." Here's IWF's Gabriella Hoffman on what they are.