Taxes shouldn’t be used to get people to do things or not do things. Taxes should be used only to fund the essential services of the government: common defense, a legal system to enforce contracts, and that’s about it.
When taxes are used as a means of control, that’s totalitarian. Tax policy should always be neutral.
Technically there's no difference between the government deciding to:
1. give everyone who does X US$300
2. give everyone who does X a US$300 tax credit
Both rely on the collection and disbursement of government revenue, which is typically accomplished via taxation.
However, 1. does not introduce any new clauses to the tax code. 2., by contrast does, and it generally functions as a slow steady drip, drip, drip of new clauses.
We therefore end up with an extremely complex tax code, instead of a simple tax code, and legislative acts to pay people for doing things we choose (via political process) that we want done.
The main difference is that not all credits are refundable. If you have a $7500 nonrefundable credit, but only have a tax liability of $5000, that extra $2500 just vanishes.
Tax should also control for externalities. Especially 'common good' pollution/destruction/captation.
It's too easy to make a company go bankrupt with LLC, so taxes are the only way. Unless you have a better idea? (I once had a libertarian explain to me the owners/investors should be liable for externalities, and in this case, taxes shouldn't control for it. I couldn't really disagree, but even staunch communists understand the issue with that).
So you wouldn't be in favor of a carbon tax? What about a tax on tobacco sales in a universal healthcare system? (to offset tobacco users' additional healthcare costs)
I believe that tobacco use is actually beneficial under a universal healthcare system. Dying early from cancer is a bummer at an individual level, but much cheaper than getting old and the additional care needs that come with that. So you'll be paying almost as much in taxes as someone who doesn't partake,while getting a smaller amount of retiree benefits in return.
Maybe there should be a tax rebate for smokers, so they can buy more cigarettes?
You don’t just drop dead of cancer. There is an extensive treatment process involved which is rather expensive and not guaranteed to work. So this argument doesn’t really hold.
And “sin taxes”, i.e. tobbaco taxes and carbon taxes are a logical fallacy.
Tobacco tax won’t offset the additional healthcare costs for smokers on average, so it ends up just being a penalty for having a bad habit, and carbon tax will simply put a price tag on high carbon emissions.
Kind of tangential - the tobacco tax is a fallacy in another way: without taking into account quality of life adjustments, smokers are actually a net benefit for society in healthcare costs [1]. The simple reason is because they die earlier and most healthcare costs are incurred near the tail end of life, so by shortening those final years it becomes much cheaper for society to pay out.
The "essential services" are kind of the big thing in dispute -- you say "common defense, a legal system to enforce contracts" and that's a typical libertarian perspective, but certainly not the only set of essential services that reasonable people could posit for their government.
When taxes are used as a means of control, that’s totalitarian. Tax policy should always be neutral.