OKLAHOMA LAW REVIEW
To encourage work, instead of the current family-based earned-income tax credit, that system should have a $2,000-per-worker earned-income tax credit, computed as 20% of the first $10,000 of earned income.
Also, to simplify the tax and welfare systems, we should replace personal exemptions, standard deductions, child tax credits, and much of the current welfare system with universal $2,000-per-person refundable tax credits. Under such a system, a working, single parent with two children would receive $6,000 a year in personal tax credits and a $2,000 worker credit. These tax credits should be paid out on a monthly basis. Each individual would present something like the current IRS Form W-2, Wage and Tax Statement, to her employer or to a bank. Employees would then receive advance payment of their tax credits from their employers in the form of reduced withholding, while other claimants would have their monthly payments directly deposited into their bank accounts.
This comprehensive tax and transfer system would be simpler than the current system, it would encourage low-income Americans to enter the workforce, and it would minimize the work disincentives on higher-income workers.
As an initial step toward a comprehensive tax and transfer system, we should cash out the Food Stamp Program.17 In 2005, we gave an average of ninety-three dollars a month in food stamps to twenty-six million low-income
17. See generally 7 U.S.C.A. §§ 2011-2036 (West 1999 & Supp. 2006).