The most obvious is to exempt food and scrap the prebate. This way the government is not sending a $300 checks every month to every bum in this country keeping him supplied with wine and crack. Would save billions in administration costs.
Do I have an incentive under the rebate scheme to claim more kids than I have?
"The most obvious is to exempt food and scrap the prebate."
Nope. The most obvious is to eliminate the prebate and lower the rate. Once you start having exemptions, the list grows and grows based on lobbying successes. Take away all exemptions and remove the power from tax policy lobbyists. Give the power back to the people.