I need to make a clarification on my own suggestions for tax reform in my last post. Admittedly, neither proposal are directly targeted at helping the poor. Both are focused more on simplification of the tax code and minimizing loopholes.
The first proposal (eliminating tax breaks for charitable giving) is largely motivated by the principle of the matter. Charity should be done for its own sake, not because it benefits oneself. I wonder how often these tax loopholes are exploited in the same manner as the Leavitt family?
The dependent tax credit is certainly a complex issue. Yes, in many places it is the poor who tend to have larger families—though I doubt the correlation between poverty and large families is very strong in Utah. But virtually every time I’ve heard someone in Utah defend the tax credit for dependents (usually by middle-income or higher men), their primary argument in favor of the tax credit is the question “Do you have any idea how expensive it is to raise children these days?” The relative expense of child-rearing these days is irrelevant to the question. For the most part, particularly among these middle-class families, child-bearing is a conscious choice. If you (as I do) feel that raising a large family is rewarding, worthwhile, and even in some senses a moral obligation, fine. You are welcome to make that choice, and I rejoice in that choice. But it is not appropriate for those with the means to provide for that family to try to shift the costs of that choice onto the government. As each additional child increases the cost on the state (a place in school, police protection, etc), those who make the choice should bear a fair share of that cost.
I believe that a moderate progressive tax is generally beneficial to the poor. fewer tax breaks means fewer opportunities for the wealthy to reduce their tax responsibilities, and thus more funds are available to serve the public needs (education, emergency services, social safety nets, infrastructure, etc). The tax burden on the poor is minimized because of the nature of the progressive tax. And the system becomes simpler to implement and follow.
Again, this is a very simple account of what is a more complex issue. I’m not stating a definitive answer. Merely pointing to where I think we should focus our exploration of possible solutions to true tax reform.