Republican vice presidential candidate J.D. Vance is in the news for an old video of him talking about how the tax code should penalize adults without children. While Vance’s proposal may be intended to address demographic issues, it represents a misguided approach that violates fundamental principles of economic freedom and fairness.
do you know? That’s exactly what our tax code already does, in this case and many others.
Using the tax code to “reward” parents and “punish” non-parents goes against the idea of a neutral, efficient tax system. In an ideal and fair world, the tax base would be broad but tax rates low. People with the same income should pay the same level of taxes no matter how they choose to live.
Unfortunately, tax laws are neither fair nor neutral. It punishes and rewards various behaviors based on what government officials judge to be good or bad.
For example, the tax code does, in fact, treat people without children more favorably than people with children. And, of course, there’s the child tax credit. Then there’s the earned income tax credit, which is more generous to families with children than to families without children. And there are other provisions, such as a very large deduction for heads of household and another deduction for dependent care, that serve the same purpose.
It’s hard to know exactly what Vance meant by his proposal. Does he want another surcharge on childless parents? Does he want to expand the child tax credit and make it a universal basic income, as many conservatives and progressives want? It’s unclear whether he simply doesn’t realize that our tax code already gets his wish and punishes childless adults. Regardless, I think he means well and he has reason to be concerned about the decline in fertility we are witnessing not only in this country but around the world.
Unfortunately, punishing childless parents with additional taxes does not increase fertility. On the one hand, we have had a child tax credit since the 1990s, and the tax credit has been regularly extended. This does not encourage people to have more children.
This is not unique to the child tax credit. There is overwhelming evidence that various government programs designed to encourage, reward or stimulate the supply of babies generally fail. One of the most striking examples is South Korea. The country has spent more than $200 billion on such policies over the past 16 years, and fertility rates continue to decline.
There is no doubt that a larger population, and thus more babies, is a boon to our lives and our economy. But this is not in itself a sufficient reason for government subsidies. Although the cost of raising children is high, this is not a reason for the government to cut taxes.
Furthermore, careful research shows that the cost of raising children in the United States has been falling over the past six years. Finally, I encourage advocates not to reward families with tax cuts at the expense of childless adults, but to focus on removing existing government barriers—such as overzealous policies that make child care more expensive but Children are not safer – making life more complicated for families.
Ultimately, these are only minor aspects of a larger debate. Our tax code is deeply unfair. It’s not just childless adults who face surcharges compared to parents. Tax breaks for homeowners mean renters can pay more for the same amount of housing. Households that include college students pay less in taxes. People who can afford electric cars can get tax breaks that others can’t.
These tax breaks for some are not only unfair to taxpayers who don’t get the breaks, but they also make our tax code a mess that requires millions of hours to comply with. Rather than adding more complexity and bias, we should be moving in the opposite direction—building a simpler, flatter, more neutral code that treats all taxpayers equally.
Using the tax code as a tool of social engineering is wrong. It leads to economic inefficiency and infringes on individual freedoms. Instead of doubling down on fixing the problems with the current system, we should be working on comprehensive reform. Only then can we hope to see taxes that truly serve the interests of all Americans, regardless of their personal choices.
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