In the Washington Times, think tanker Curtis Dubay offers a tough critique (the headline is misleadingly conciliatory) of the Lee–Rubio tax reform. I don’t think that critique holds up.

Dubay’s main point is that the plan could and should have been geared more toward economic growth: ”A consumption tax with a low rate would boost the median family income by approximately $5,000, according to the Tax Foundation,” which is more than a lot of families would get from the Lee-Rubio plan. It’s a misleading comparison. Go to Dubay’s longer paper on this subject, follow the footnotes, and you’ll find a short discussion of this ideal consumption tax (on pp. 13–15 here). The idea is that we could get the same revenue as the current tax code generates with an 11.25 percent consumption tax, if we assume that the Tax Foundation’s modeling of that tax is correct in concluding that it will cause an explosion of economic growth. And while it’s not spelled out, it appears likely that the tax has no mortgage-income deduction, no charitable deduction, and no child credit. Whether there is any equivalent to the personal exemption, and if so how big it would be, is also not spelled out. And of course the plan eliminates all graduated rates.

So what Dubay is saying is that compared to a plan written with no concern for political practicality, the Lee-Rubio plan does less to promote growth. That’s not much of an indictment. But even at that, he overstates his case. The Lee-Rubio plan includes pro-growth elements that Dubay’s op-ed doesn’t mention, and presumably therefore would generate some of that $5,000 in gains for family income if judged according to the same assumptions.

Dubay’s second point is less compelling still.

The senators argue a higher child credit is necessary because parents pay into old-age benefit plans like Social Security and Medicare twice: first with their own payroll taxes and again by bearing the expense of raising children who will pay into those programs in the future.
Lower taxes for parents would compensate for those costs, and therefore reduce a bias against childbearing, so the thinking goes. This is a novel attempt to extend the central principle of tax policy — neutrality — to the question of family size. But neutrality should remain applicable only to economic considerations.

And that’s it. This section of his argument terminates with the assertion of a bit of dogma that makes no sense. Dubay is saying that policies biased against raising children are no problem because whether or not to raise them is a decision with no economic dimensions. That rumbling you hear is coming from Gary Becker’s grave. But if Dubay is right, then there can be no objection in principle to a much bigger child credit than the one Lee and Rubio are proposing. We can have a massively pro-child-rearing policy, in other words, since “neutrality should remain applicable only to economic considerations.” In other words, the main argument in principle that a few conservatives have made against the Lee-Rubio proposal falls.