Hey, here's a blog post I started last November and never got around to finishing. What would my ideal tax reform be? Here are some ideas I have.
1. The government has to keep track of your money and tell you what it was spent on. There are several charities which do that, it'd be nice to see the government do this.
I especially like this idea, because it imposes no burden on the IRS. The IRS doesn't get to keep a cent of the money it collects. Did you know that? All money sent to the IRS goes straight to Congress, which redistributes the money however it wants to.
2. I would make social security income non-taxable under all circumstances. Any President who does that is basically guaranteed to be reelected. Currently, social security is non-taxable, as long as your income is under a certain level. I don't know the specific threshold, but if social security is your only source of income, you're basically guaranteed not to be taxed on it.
3. I'd get rid of "Head of Household" as a filing status. Replace it with "single parent" or something people actually understand. Sorry, but I've dealt with too many people who think "head of household" means "the one who makes all the decisions in the house". Uh, no. That is completely irrelevant, when it comes to tax law.
4. I would make registered domestic partnerships count as marriages, for federal tax purposes. I'd also get rid of the marriage penalty. Let's not punish people for being married! Marriage is awesome!
5. I would make charitable donations an above-the-line deduction. I understand that's gobbledygook to some people, so let me explain. The current system requires you to jump through some hoops, before you can get a tax break for donating to charity. Only about 25% of people were able to jump through those hoops, in 2016. I'd move the "charitable donations" tax break to a different part of the tax form, so everyone can get it.
6. Childcare is stupid expensive. I would create a childcare tax credit, to encourage people to have more children. Alternately, I would encourage people to have children by greatly increasing the child tax credit and/or the EITC. Say, $4,000 per child?
Why should tax laws encourage people to have children? They already do. The reasoning is that the children will grow up to become taxpayers themselves, so any "encourage people to have children" tax breaks will pay for themselves. Other countries have done things like free schooling to encourage childbirth.
The complaint I've heard is that these credits encourage the wrong kind of people to have kids. Whenever someone says that, I ask them what their definition of "wrong" is, because that sounds dangerously close to "poor people shouldn't have kids".