JD Vance is right: Of course bigger families should, and do, pay less in taxes

Sen. J.D. Vance (R-OH) articulated a basic long-standing premise of U.S. tax law, and Democrats responded in shock. Then, the news media joined in.

Check out this breathless post from a massive pro- Kamala Harris account with half a million followers:

Then, the news media followed Team Harris’s lead.

“Vance argued for higher tax rate on childless Americans in 2021 interview,” the ABC News headline blared .

Look at ABC’s framing:

“As former President Donald Trump's new running mate, J.D. Vance , faces renewed scrutiny over his previous comments criticizing childless individuals, an unearthed 2021 interview shows the Ohio senator advocating for higher taxes on Americans without children.”

In objecting to “higher taxes on Americans without children,” ABC News and Harris supporters are implicitly arguing for a tax code that doesn’t count children as humans. That would represent a massive tax hike for families, especially low-income and working-class families.

Look at what Vance said:

“If you’re making $100,000 or $400,000 a year and you’ve got three kids, you should pay a different, lower tax rate than if you’re making the same amount of money and you don’t have any kids. It’s that simple.”

Vance framed this in a culture-war way and seemed to imply that the current tax code doesn't do this, but he’s hardly proposing something radical. In fact, he’s describing the current tax code — and the tax code for all of the recent past.

Let’s do standard math:

Consider two couples making $100,000. For simplification, let’s say this is $100,000 after deductible or excludable costs such as health insurance premiums, retirement contributions, and some commuting costs.

Under current tax law, both couples would take a $29,200 standard deduction and thus have $70,800 in taxable income. That would be $8,032 in federal income taxes, but then the child tax credit enters.

The childless couple gets no child tax credit. The couple with three children gets three CTCs worth $2,000 each.

In the end, the childless couple pays $8,032, or an effective rate of about 8%, while the childful couple pays $2,032, or an effective rate of about 2%.

This is a scandal in the eyes of Harris supporters and ABC News. What they want, in effect, is the abolition of the child tax credit.

If we went back to the Obama-era tax code, it wouldn’t be only the effective tax rate that would be lower for the family with children but the marginal tax rates, too.

Under the 2017 tax code, before the Tax Cuts and Jobs Act cut taxes for this middle-class family, the couples would both get $12,700 in standard deductions, plus they would get personal and dependent exemptions at $4,050 each. The family of two would get two such exemptions, while the family of five would get five. As a result, the taxable income for the childless couple would be $79,200, in the 25% bracket, while the larger family has $67,050 in taxes — the 15% rate.

So, in every recent incarnation of the U.S. tax code, a childless family has paid more taxes on the same income compared to a childful family. This isn’t radical, even if Vance framed it in culture-war terms. The premise is that five people need more money to achieve the standard of living as two people, and so they should be taxed according to their standard of living.

When Harris supporters and ABC News treat this as radical, they are implying that five people living off of $100,000 should be taxed the same as two people living off $100,000. The logic here is hard to grasp. Does this logic extend to two adults in a household versus one adult? That a couple earning $100,000 total should pay the same in taxes as a solo person earning $100,000?

That would be a fiercely anti-family, anti-marriage tax code.

Instead of moving in that direction, both parties ought to make the tax code more family-friendly.

The child tax credit isn’t currently indexed to inflation, and so it has lost more than 15% of its value since 2018. It should be increased to $2,400 and then set to go up automatically with inflation every year.

Another pro-family move would be to allow parents to claim a larger credit in years 1-6 in exchange for a smaller credit in the later years. Also, it’s senseless that the CTC ends when the child is 16 years old. Parents should get a tax credit up until the child’s 18th birthday.

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Also, Social Security taxes need to be addressed. Today’s workers pay for the benefits of today’s retirees, which means today’s childless adults are banking on the childrearing of today’s parents. That implies two tax policies:

The child tax credit should be fully refundable against payroll taxes. Parents of minors should get a payroll tax break, perhaps an exemption up to the poverty line.

A pro-family tax policy is particularly a need these days with record-low birth rates. It doesn’t help when Harris supporters and the news media object to anything that reeks of helping parents.