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Notes -
I agree that focusing only on income tax probably doesn’t capture the full picture. A more useful way to approach the issue is to look at the overall cost of living and the net resources households actually have available. Housing, childcare, healthcare, education, and other expenses can place a significant burden on families regardless of whether their income tax liability is high or low.
Regarding the second point, my argument is simply that reproduction in any natural system requires a positive inflow of resources. For humans, that translates to having sufficient financial stability to support children, and for most people: maintaining a desired standard of living. People have different expectations for quality of life, and most are not willing to significantly lower their living standards just to have one or more additional childeren. I would argue that if families could maintain their current social and economic position while experiencing an increase in disposable income, many would be more inclined to have more children.
Fundamentally, modern capitalism rewards childless women with status--higher incomes, more prestigious jobs, bigger homes, more fame and attention. If you're status-maxxing in the modern world, then family is an impediment to success. This competition favors women who eschew femininity and childcare, and so women predisposed as such increasingly set the pace in the status race. Other women, even those who merely seek to settle into the middle of the pack (to feel "normal"), marginally shift their priorities and goals in the same direction as the childless workaholics. This extreme shift in the female status hierarchy is relatively recent, and it is unsustainable over multiple generations for obvious reasons.
Children are a public good that is being under supplied because women now have fewer ways to internalize the benefits in the short run. Status is not the only motivation to supply public goods, but it's a big one, perhaps the biggest, and it is likely necessary to get over the hump of replacement fertility rates.
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