Tax reform shouldn't penalize single-worker families

January 27, 2015

If you’ve been following national politics lately, you might have noticed the two political parties seem to have found some common ground. Almost everyone in Washington today is talking about the same thing: helping America’s working and middle-class families.

This is a welcome, if overdue, development. Today, far too many moms and dads — married and single, in Utah and across the country — are working harder than ever to make ends meet.

But beneath the surface of political spin, there are important differences in how exactly the left and right propose to reduce the burdens holding back American families.

In his State of the Union address last week, President Obama called for “lowering the taxes of working families and putting thousands of dollars back into their pockets every year.” As a proponent of tax fairness for families myself, I was encouraged to hear the president acknowledge the struggles of America’s working parents.

But the actual policy the president proposed falls short of the standards I believe must guide all government reforms — standards that he set out himself in the same speech: that “everyone plays by the same set of rules.”

The problem with the president’s proposal is that he wants to cut taxes for only one particular type of family.

Specifically, the president proposed a new $500 tax credit only for families with two incomes, and he called for an increase in the child-care tax credit. That is, he wants to use the tax code to reward two-income couples who put their children in commercial day care, while leaving behind couples who choose to have mom or dad stay at home.

The president is right that it takes a great deal of time, money and energy to raise children. But why should politicians reward some family arrangements and penalize others?

Every family has to make its own tradeoffs when determining how to divide responsibilities inside and outside the home — government shouldn’t put its thumb on the scale one way or another. Rather, policy should strive to treat all such choices equally, giving every family — regardless of its structure, income and values — the flexibility to make the choices best for them.

That’s the idea behind my own tax reform proposal, which would eliminate preferential tax benefits for this or that parental choice and replace all of those with a new tax credit of $2,500 per child. Under my plan, families would be eligible for the credit regardless of whether they had one income or two, or whether they used commercial day care or chose to have mom or dad stay home with the kids.

What each family did with the money would be up to them, not the government, as it should be.

Just as my plan wouldn’t give preferential treatment to one kind of parent over another, it also wouldn’t privilege parents over taxpayers without children. On the contrary, it’s designed to correct the unfair over-taxation of parents in the current system.

Today, parents effectively pay into the senior entitlement programs twice: once through their payroll taxes and again in bearing the costs of raising their children — the next generation of payroll taxpayers. An expanded child credit would not create a new distortion in the tax code, but correct an existing one.

In contrast, President Obama’s plan would penalize those families — including many in Utah — that choose the breadwinner/homemaker model by narrowly tailoring the expanded tax credit to benefit only those parents who use commercial day care.

Rather than pitting different kinds of families against one another, real reform should guarantee all families an equal opportunity to pursue their happiness according to their own values and goals.

Some have said that President Obama’s tax plan represents a missed opportunity for bipartisan compromise. I disagree. Having two different plans on the table doesn’t signal the end of a failed negotiation, but the beginning of what could be a productive debate.

I’m glad the president recognizes that our tax code doesn’t work for America’s moms and dads, and I look forward to advancing reforms alongside anyone committed to fixing it for all families.

Op-ed originally published in the Deseret News