You make it sound like if you simply CHOOSE to make only enough to sustain yourself (and as big a family as you desire) then you have no tax obligation at all.
I suppose you could look at it that way. However you, I, and several others have already pointed out in this thread that most people don't choose to be poor. Most don't choose to make only enough money to buy the basic necessities. Now there might be some people that would choose to do that, but that number would be so low as to be irrelevant on the scale of the country as a whole.
That is INSANE. You then convert income tax into basically a luxury tax.
And what if it is? I don't think that's insane at all. The fact that you think someone can (or would) pay income tax when they're barely able to put food on the table for their kids is far more insane.
The simple answer is that if you can not afford to raise a child that you wait until you can to have that child, not that you trade raising a child for paying your income taxes. If you can not afford a big house then you live in a smaller one or share one. As it is now, I pay for the education of the children for those that pay no taxes at all, plus the money to feed and house those ADULTS that chose to have them, that is insane.
Once again, that's a nice simple answer, but it's too simple for the real world. Let's say a family of four is living on $50,000 a year. Mom is making $10,000 a year working in the evenings (so that they don't have to pay for child care) and dad is making $40,000 a year working on the line at an auto assembly plant. Neither one has a college degree that would allow them to get a more lucrative job. Assuming the $10,000 deduction you suggested, and a tax rate of 20%. They pay $8,000 in taxes. Let's say it takes $30,000 to buy basic necessities for their family of four. Currently, they're doing okay. They bring home $42,000 a year after taxes. Plenty to live on and still afford a few luxuries. Then a recession hits, and dad loses his job. He finds another job, but it only pays minimum wage, so now he's only making $16,000 a year. Mom is able to switch to full time second shift, so her salary goes up to $16,000 a year as well. Now, together, they're making $32,000 a year. After taxes though, they're only bringing home $27,600. That's not enough to meet their basic needs. Now which do you think that family will choose to do, go hungry, or not pay their taxes?
The numbers in the scenario might not be completely realistic, but it serves to illustrate my point. People may choose to have children when they have enough money to do so, and later find themselves in worse financial circumstances that make it much harder to afford the size family they have. What are those people supposed to do? Just give their kids up for adoption? Or are people supposed to never have kids even if they can currently afford them, but at some point in the future they might not be able to? That would more than likely result in the extinction of the human race. Congratulations, you've just wiped out our species.