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Parents Tax Relief Act: Best Pro-Family Legislation in Decades?

July 1, 2005

Volume 7 / Number 25

Dear Colleague:

By eliminating a major piece of discrimination in the federal tax code, the Parents Tax Relief Act could make a big difference in preserving America’s tattered family structure. Steven W. Mosher President

PRI Weekly Briefing 

1 July 2005

Vol. 7 / No. 25

Parents Tax Relief Act: Best Pro-Family Legislation in Decades?

Congressman Lee Terry (R.-Neb.) has authored what family scholar Dr. Allan

Carlson calls “the most important piece of pro-family legislation to be

introduced in decades.”  The Parents Tax Relief Act (bill number HR 3080)

would rectify discrimination against stay-at-home mothers in the tax code

and provide other tax savings to families with homemakers and home-based

businesses.  Sen. Sam Brownback (R.-Kan.) introduced companion legislation

(S 1305) in the Senate.

The centerpiece of the bill is its extension to stay-at-home moms of the

Dependent Care Tax Credit (DCTC), which currently applies only to paid day

care-thus granting a financial incentive for mothers to work outside the

home rather than take care of their own young children.  By discriminating

against stay-at-home mothers, the tax code privileges a two-earner

lifestyle that degrades family and community life, especially at the

expense of children.  Under the Parents Tax Relief Act (PTRA), “a

stay-at-home parent is treated equally,” Cong. Terry told PRI in an

interview.  “Families with household incomes in the $50,000 to $60,000

range could save $3,000 to $4,000 per child per year.  Of course, there

comes a point where you don’t pay taxes anymore.”

That should be the goal: Lower- and middle-class families with children

should not have to pay federal income taxes.  Extending the DCTC should

eliminate that tax liability for many families with homemaking mothers,

though Terry said that specific figures on the bill’s effects, such as how

much it would save American families overall, won’t be available until


Asked why the DCTC hasn’t been extended before, Terry said, “That’s a darn

good question and I don’t have an answer for that.  I’ve heard from so

many stay-at-home parents.”

“You can’t take for granted economic incentives in influencing social

structures,” said Congressman Jeff Fortenberry (R.), a fellow Nebraskan

and original co-sponsor of Terry’s bill, in a separate interview.

Fortenberry said that there are values at stake when it comes to raising

children, and that although the fight for passage of this bill will be

“uphill in tight budget times,” he believes that “the tax code should not

be biased against those values.”

PTRA would also make the $1,000 child tax credit, set to expire in 2010,

permanent; increase the personal tax exemption to $5,000 from $3,100;

simplify tax deductions for home-based businesses; create a telecommuting

tax credit to facilitate mothers (or fathers-the bill is entirely

gender-neutral) working from home; and let mothers have up to ten years of

Social Security employment credits for taking care of children 6 and

under, thus preserving Social Security benefits that would otherwise be

reduced when they left the workforce; and almost eliminates the

still-lingering but hard-to-eradicate marriage penalty, which causes some

people to pay more in taxes after they marry than they did when single due

to the inherently unfair nature of our progressive income tax system.

Stay-at-home mothers would not lose the DCTC if they earned outside income

while working at home with their children.

Terry said that he didn’t expect his Parents Tax Relief Act to advance

legislatively this year.  “My goal in introducing it was to educate and

build interest this year in preparation for pushing it next year,” he

said.  Prospects for near-term advancement of Sen. Brownback’s companion

bill in the Senate also look doubtful.

So it’s up to pro-family Americans to educate their relatives, friends,

local media, members of Congress, and the White House about this piece of

legislation.  Not only is extending the DCTC a matter of ending

discrimination against stay-at-home mothers and encouraging better

parenting for young children (the DCTC applies to children under 6 only),

but it could help raise the birthrate.  America’s fertility rate is at 2.0

children per woman, slightly below the 2.1 needed to replace the current

population, according to the United Nations Population Division.  That has

fueled America’s high immigration rate, but even immigration has not been

able to rescue the long-term prospects of the American health care system,

Medicare, and Social Security-all of whose problems are prime examples of

the consequences of a graying population and too few workers.  Wrote

Phillip Longman, author of The Empty Cradle: How Falling Birthrates

Threaten World Prosperity and What to Do About It, in an op-ed published

in the Washington Post on January 9, “By raising and educating their

children, parents provide the system with essential human capital.  The

cost of this contribution, in both direct expenses and forgone wages, is

often measured in the millions.  Yet parents get no compensation from

Social Security, nor from the wider economy, for the investments they make

in their children.  Instead, Social Security pays the same benefits, and

often more, to people who avoid the burdens of parenthood.  So long as

Social Security effectively penalizes people for having the very children

the system requires, it contributes to a downward spiral of falling

birthrates leading to higher and higher tax rates.”

Extending the DCTC, though it might increase the federal deficit slightly

in the short term, will improve the federal government’s solvency in the

long term by encouraging the larger number of children this country needs.

Most of those children will grow up to be productive, tax-paying

Americans who return more to the economy than they take out.

And getting more young kids out of day care and back home will have a

plethora of positive benefits for them and for society, including

financial ones.  Brian C. Robertson documents the damage inflicted on

children and thus society at large in Day Care Deception: What the Child

Care Establishment Isn’t Telling Us.  He summarized the data in an

interview with Kathryn Jean Lopez of National Review, Oct. 1, 2003.  A

child in day care “is eighteen times more likely to become ill compared

with children at home, four times more likely to be hospitalized, and at

50 to 100% increased risk for contracting a fatal or maiming disease for

each year in day care,” Robertson said.  “Where, according to the

government’s own on-going study of child care, that child has a three

times greater risk of developing serious behavior problems like

noncompliance, talking too much, arguing a lot, temper tantrums, demanding

a lot of attention, disrupting class discipline, cruelty, meanness,

bullying, explosive behavior, and getting in lots of fights.  I think

these and other findings show that this vast social experiment of taking

pre-school children out of the home setting for most of their waking hours

is incredibly risky at best.”

Studies show that day care is bad for kids.  But how can we convince

American mothers to stay at home if they no longer want to?  Actually, we

don’t need to.  According to Terry’s office, 77% of working mothers wish

they could stay at home full time but 60% of households with children

under six have both parents in the workforce.  “The most comprehensive

survey yet done on child care-by the non-partisan group Public

Agenda-found that parents prefer one parent to stay at home over a

‘quality’ day-care center as the best arrangement for children under five

by a margin of 12 to 1,” said Robertson, “71% agreed with the statement

that ‘parents should only rely on a day care center when they have no

other option,’ and 8 out of 10 young mothers with pre-school children

professed the desire to stay home with them rather than continue to work.

In terms of policy, both fathers and mothers prefer options that would

‘make it easier and more affordable for one parent to stay at home’ over

those that would ‘improve the cost and quality of child care’ by a margin

of 2 to 1.”  PTRA does as they desire.

Brownback, in a June 23 statement in the Congressional Record about PTRA,

noted the terrible burden that the federal government is now placing on

families.  “In 1948, the average family with children paid 3% of its

income in federal taxes,” he said.  “Today, that same average family with

children pays almost 25% of its income in federal taxes.”

Terry’s and Brownback’s Parents Tax Relief Act gives the vast majority of

American parents what they want, and what is demonstrably better for their

children.  The opposition will come from the decadent and power-hungry

other side of the culture wars, those politicians, bureaucrats, and

experts who wish to continue the detachment of children from their own

families and increase their control over America’s young.  “They deeply

distrust the competence of parents to raise their own children,” said

Robertson of the United States’ child-care establishment.  “They are much

more comfortable with the notion of child-development experts taking the

leading role in the formation of children, not only in an academic sense,

but in terms of moral values as well.  It’s the ideological subtext of the

debate over day care.”

Joseph A. D’Agostino is Vice President for Communications at PRI.

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