Personally, I'd like to see everyone pay at least some income tax, and I'd like to see the amount of tax paid, by everyone, go up or down every year in tandem with federal spending. That would encourage fiscal discipline directly. It would also make it harder for politicians to promise everybody a free lunch, but hey -- why shouldn't they sacrifice something, too?I don't know that everyone should be paying taxes. But I do think the tax-free break point should be indexed to something significant like the poverty line. I'm not against people barely getting by, getting tax relief and at least then it isn't completely arbitrary.
Unfortunately with what little reading I've done on the derivation of poverty line incomes, they seem to be developed somewhat arbitrarily and tying those values to taxation would almost certainly politicize the system even more. There is pretty good evidence that poverty line incomes have grown faster than inflation for instance.