Republican vice presidential candidate JD Vance has made headlines with an old clip of him saying the tax code should punish childless adults. Vance’s proposal aims to address demographic concerns, but it represents a flawed approach that contradicts fundamental principles of economic freedom and fairness.
And you know what? That’s exactly what our tax laws are already doing, in this case and in many other cases.
Using the tax code to “reward” parents and “punish” non-parents is contrary to the concept of a neutral and efficient tax system. In an ideal and fair world, the tax base would be broad but taxed at low rates. People earning the same income would pay the same amount of tax regardless of how they choose to live their lives.
Unfortunately, tax laws are neither fair nor neutral. They punish and reward all sorts of behaviors based on what government officials determine to be good or bad.
For example, the tax law actually treats people without children more favorably than people with children. There is, of course, the child tax credit. And there is a more generous earned income tax credit for families with children than for families without children. And there is no shortage of other provisions, such as a very substantial deduction for the head of household and another deduction for care of dependents.
It’s hard to know what Vance’s proposal actually entails. Does he want to impose another surtax on childless parents? Does he want to expand the child tax credit and make it a universal basic income, as many conservatives and liberals want? It’s also unclear whether he doesn’t see that our tax code already does what he wants, punishing childless adults. Either way, I think he means well and is rightly concerned about the declining birthrate we’re seeing in this country and around the world.
Unfortunately, taxing childless parents will not increase birth rates. First of all, we have had the child tax credit since the 1990s, and the tax credit has been extended regularly. It has not encouraged people to have more children.
It’s not just the child tax credit. There’s a lot of evidence that shows that any kind of government program that tries to encourage, reward, or stimulate the supply of babies generally fails. One of the most dramatic examples is South Korea, which has spent more than $200 billion on such policies over the past 16 years and its birth rate is still falling.
There is no doubt that more people and more babies are a great help to our lives and economy. But that alone is not enough to warrant government subsidies. And while raising children is expensive, that does not justify government tax breaks.
Moreover, careful studies have shown that the cost of raising a child in the United States has been falling for 60 years. Ultimately, rather than lowering taxes at the expense of childless adults, advocates would be encouraged to focus on removing existing government barriers that make families’ lives more complicated, such as overzealous policies that make child care more expensive but do not make children measurably safe.
Ultimately, these are just sidebars to a much larger argument. Our tax code is grossly unfair. It’s not just childless adults who pay more in taxes than their parents. Tax breaks for homeowners mean renters pay more for the same amount of housing. Households with college students pay less in taxes. People who can afford electric cars can secure tax breaks that others can’t.
To some, these tax breaks are not only unfair to taxpayers who do not pay taxes, but they also create a complex mess that requires millions of collective hours to comply with our tax laws. Instead of adding more complexity and bias, we should move in the opposite direction. We should move toward a simpler, flatter, and more neutral code that treats all taxpayers equally.
Using tax law as a tool of social engineering is wrong. It creates economic inefficiencies and infringes on individual liberty. Instead of doubling down on the problems of the current system, we should work toward comprehensive reform. Only then can we see that taxes truly serve the interests of all Americans, regardless of their individual choices.
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