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A
century ago, President Theodore Roosevelt remarked: “it is in the life of the
family, upon which in the last analysis the whole welfare of the Nation
rests….The nation is nothing but the aggregate of the families within its
borders.”[1] He added that “everything” of value in
American public life “rests upon the home.”[2]
Today, members of Congress—led by Senator Sam Brownback
and Representative Lee Terry—reaffirm these truths and put forward a set of new
policy ideas to strengthen the autonomy of the family in America. The “Parents’ Tax Relief Act of 2005” is, in
my opinion, the most important piece of pro-family legislation to be introduced
in decades. It recognizes the value of
the parental care of small children and expands the child care choices of
mothers and fathers. It affirms
marriage as a public good and restores recognition of the marital couple as an
economic partnership. The bill properly
affirms the value of children to the nation and responds to the extra economic
burdens faced by young parents. This
measure seeks to reduce conflicts between workplace and home by making it
easier for the home itself to be a place for market labor. And the measure recognizes the full-time
mother or father as doing publicly valued work, deserving recognition within
the Social Security system.
These
approaches are distinctly American.
Most other developed nations provide state child allowances to parents
as offsets to the costs of rearing children.
However, this method tends to make families wards of the state and to
weaken marriage. In contrast, the
“Parents’ Tax Relief Act of 2005” uses carefully targeted tax policy measures
to enable families to retain more of their own earned income while
children are in the home. The record
shows that this approach supports family formation and strengthens homes.[3]
Viewed
from another angle, this bill would also eliminate problems and inequities that
have crept into federal tax policy. For
example, federal law currently gives a generous tax credit, or subsidy, without
income limit to parents who purchase day care.
However, existing policy gives no recognition at all to full-time
parental child care which, social science shows, is predictably better for
young children.[4] The “Parents Tax Relief Act of 2005” would
set things right by granting a tax credit of up to $250 per month for families that
make the financial sacrifice to have one parent serve as the full-time, at-home
caregiver for children ages six and under.
On the one hand, this measure creates a level playing field; on the
other hand, it expands the child care choices of all families.
Second,
the infamous “marriage penalty” remains alive and well. The tax cut of 2001 removed this penalty
only for the 15 percent tax bracket.
The “marriage penalty” still afflicts the majority of Americans affected
by the middle and high tax brackets. Today’s
new bill would fully eliminate this penalty by making all tax brackets twice as
wide for married couples, as compared to singles.
Third,
the per-child tax relief provided by the existing personal exemption and the
child tax credit are inadequate, well below the relief delivered by the
exemplary, pro-child Tax Reform of 1948.
Today’s bill would raise the personal exemption for children to $5,000 and
would make permanent the $1,000 per child tax credit and index it to inflation,
in order to protect its future value.
Reflecting
old assumptions about the need for industrial centralization, federal tax
policy still favors large central offices and factories over market labor in
the home. The “Parents Tax Relief Act
of 2005” would simplify and expand the availability of the deduction for
business use of the home and also encourage telecommuting. These are progressive ideas designed to increase
family-friendly, home-centered work opportunities in the new information
age.
Finally,
the Social Security system fails to recognize the full-time care of small
children as real work (even the existing “homemakers” pension has no linkage to
children). This is troubling, for there
is strong evidence that existing incentives within Social Security discourage
the birth of children,[5]
while such new children are in fact needed to maintain the system in the
future. Today’s bill boldly faces this problem
by granting employment credit toward future Social Security benefits to those
parents who make the sacrifices to raise their children, full-time, at
home.
Near
the end of his Presidency, Ronald Reagan said:
[T]he family is the bedrock of our nation, but it is
also the engine that gives our country life….It’s for our families that we work
and labor, so that we can join together around the dinner table, bring our
children up the right way, care for our parents, and reach out to those less
fortunate. It is the power of the
family that holds the Nation together, that gives America her conscience, and
that serves as the cradle of our country’s soul.[6]
Today, Senator Brownback, Representative Terry, and
their colleagues here lead the way to a rekindling of that spirit. They transform pro-family rhetoric into
policy ideas that can make a real difference for American families. I am most grateful to them and, as our
Nation’s Founders would have said, I wish them Godspeed.
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