Family Friendly Tax Reform

The family should be the bedrock institution of our Republic. Unfortunately, more often than not, government policy rarely considers policy impacts to families. It is almost unheard of for policy makers to start from the position of creating policies that promote and benefit families. In many cases, we pass policies that unintentionally penalize marriage and families. Many experts are starting to recognize that this needs to change.

A policy environment that favors strong, stable families will reduce poverty, increase economic opportunity, increase upward mobility, and reduce demand for the services that are often poorly provided by patronizing big-government programs. One of the best places where we can start to shift policy in a pro-family direction is in the tax code.

We need to start with the tax code, because the tax code is an area where the penalty on families is significant. The tax code also offers some of the easiest adjustments we can make that would have the biggest impact.

The Parent Tax Penalty

The best way to define the parent tax penalty is to compare two households. The first household consists of a married couple, and the second household consists of a married couple with two children. Over 18 years each family will pay $185,000 into Social Security and Medicare. The family with two children will also pay an additional $465,000 to raise their children who will grow up to be workers who will also contribute to paying the benefits for both households. This additional $465,000 that parents pay to maintain the integrity of our entitlement systems is a penalty created by our tax system on parents.

Because this parent tax penalty is created by the tax code, we can fix this in the tax code.

In 2017, Senator Rubio and I proposed doubling the Child Tax Credit in the tax reform bill that was passed. Through a hard fought effort and assistance from Ivanka Trump, we were able to ensure that the expanded tax credits for families with children became part of President Trump’s historic Tax Cut and Jobs Act of 2017. According to the Tax Foundation, the number of people who received the Child Tax Credit doubled, benefiting American families in every income bracket, with the exception of top income earners.

This is how you create policy that benefits American families. 

This policy outcome was so successful, I believe that there is more we can do. I recently joined with Senator Rubio again to propose that we increase the Child Tax Credit to be $3500 per child and $4500 per young child. An investment in the American family is the one of the best investments we can make.