Today, the United States is beset by a crisis in inequality. It's not a crisis of unequal wealth or income, exactly — it's a crisis of unequal opportunity.
We see it up and down American society.
The underprivileged are trapped in poverty, sometimes for generations. The middle class is caught on a treadmill, running harder every year just to maintain the economic security and social cohesion that were once taken for granted.
At the top of our society, we find a political and economic elite increasingly exempted and insulated — by law — from the rigors of competition and the consequences of their own mistakes.
Many see this inequality and assume it must be a failure of the free market or due to a lack of government regulation.
But in many ways, bigger government is not the solution to unequal opportunity — it's the cause.
It is government policies, after all, that trap poor children in rotten schools and poor families in substandard housing. It is government policies that inflate costs and limit access to quality schools and health care; that hamstring badly needed innovation in higher education. And it's government policies that give preferential treatment and subsidies to well-connected corporations and special interests at the expense of everyone else.
There is a very good reason why Americans increasingly believe our system has become rigged against those who work hard and play by the rules.
America's crisis of unequal opportunity is the greatest challenge facing the United States today. We need to start developing a new agenda that restores equal opportunity — the God-given right to pursue happiness — to the families and communities from whom it has been unfairly taken.
This new agenda should address the crippling problems of immobility at the bottom of our economy, insecurity in the middle class and cronyist privilege at the top.
But to my mind, the first and most important part of this agenda should restore equal opportunity to the first and most important institution of them all: the family.
In this context, the family is not just a moral or cultural institution, but more importantly, a social and economic one. In a sense, the family is a social start-up. Young couples are the entrepreneurs. Their children are investments. Their success not only enriches each other, but the community around them as well.
If there is any single group of people in the entire country whose equal opportunity to pursue happiness we should make sure to protect, it is our ultimate entrepreneurial and investor class: America's moms and dads.
Yet sure enough, the federal government actually singles out parents of young children for unfair and extremely expensive discrimination.
And so my first contribution to this agenda is a new tax reform proposal to restore equal opportunity to working families.
The "Family Fairness and Opportunity Tax Reform Act," which I will be introducing in coming days, simplifies the tax code, lowers tax rates, and removes barriers for upward mobility.
But the centerpiece of the bill is the elimination of a hidden bias in the current tax code against middle class parents.
Here's how this "parent tax penalty" works.
Under our current entitlement system, all seniors are entitled to the same benefits, based on their total lifetime contributions. But parents are required to contribute to this system not once, but twice. First, when they pay their payroll taxes, just like everyone else. And then again, by bearing the enormous economic costs of raising their children, who in time, of course, grow up to become the next generation of taxpayers.
Today, parents receive no additional benefits for having contributed or sacrificed hundreds of thousands of additional dollars raising their kids. This is a hidden double tax on parents.
My plan corrects this discrimination by offsetting the parent tax penalty with an additional $2,500-per child tax credit.14 comments on this story
To policymakers, my proposal only makes sense. It levels the playing field so that the tax code treats all Americans more equally.
But from the perspective of a middle class family, this could be an immediate, life-changing reform. Fixing the parent tax penalty — $2,500, per child, right into the hands of working parents — could be the difference between saving for college, or moving into a safer neighborhood, or being able to stay home with young children, or not.
It will take much more than one bill to end America's crisis of unequal opportunity. But I think pro-growth, pro-family tax reform is a good start.
Mike Lee is a U.S. Senator from Utah and member of the Senate Joint Economic Committee.