[Congressional Record Volume 145, Number 29 (Wednesday, February 24, 1999)]
[Extensions of Remarks]
[Page E277]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page E277]]
                   THE CARE GIVERS TAX REDUCTION ACT

                                 ______
                                 

                         HON. ROBERT A. WEYGAND

                            of rhode island

                    in the house of representatives

                      Wednesday, February 24, 1999

  Mr. WEYGAND. Mr. Speaker, today, I rise to introduce the Care Givers 
Tax Reduction Act, which will update the Dependent Care Tax Credit to 
more accurately reflect the costs of providing care to loved ones.
  A great deal has happened in this country since 1982, including the 
price working families pay to care for their children or aging parents. 
While the cost of quality care has dramatically increased, the amount 
families can take as a tax credit has eroded during the past seventeen 
years. In fact, inflation has eroded 60 percent of the value of the 
current credit since it was last adjusted. It is time for Congress to 
update the tax credit to more accurately reflect the true costs of 
providing care for families in our districts.
  Our workforce is rapidly changing and middle aged adults are becoming 
members of the sandwich generation--providing care for both their 
children and their aging parents. Currently, the federal tax credit 
available to provide financial assistance for care is the Dependent 
Care Tax Credit. This credit is currently non-refundable so families 
with no tax liability are not able to benefit from the dependent care 
tax credit.
  The tax credit has not been adjusted for inflation since 1982. 
Currently, the tax credit only allows taxpayers to use the first $2,400 
of expenses for one child or dependent and the first $4,800 of expenses 
for two or more children or dependents. These levels are woefully low 
and do not reflect the real costs in our districts. The Care Givers Tax 
Reduction Act of 1999 will update this credit and raise the levels to 
more accurately reflect the cost of providing care--$4,000 for one 
child or dependent and $8,000 for two or more children or dependents. 
Finally, my legislation ties future amounts of the tax credit to 
inflation.
  Furthermore, my legislation would allow the maximum tax credit of 30% 
to families with an adjusted gross income of $18,000. For every $3,000 
more of adjusted gross income, the percentage of the tax credit would 
be reduced by one. The phaseout would end at 12% for families earning 
over $69,000 in adjusted gross income. Under my proposal, a family of 
four with two children in child care earning $32,000 will see their 
taxes reduced by $2,000. My legislation would not diminish any credit a 
family currently receives but would allow low and middle income 
families to receive more for providing care to their children and aging 
parents.
  This legislation will provide much needed financial assistance to 
working families for their child care needs. For example, Elaine, a 
single mother in Rhode Island, earns $28,000 a year as a clerk for a 
local utility company. Her salary puts her just above the amount with 
which she would be eligible for assistance from the state to help pay 
for the child care needs of her two children. Unfortunately, the weekly 
cost for quality care for her two children amounts to more than $200. 
Assuming her children are in day care for 52 weeks of the year, her 
child care costs would amount to over $10,000. This situation occurs 
far too frequently, with parents earning too much to qualify for 
assistance but not enough to afford quality child care without any 
assistance.
  Currently, Elaine would receive the maximum tax credit of $1,440 to 
help her pay for child care expenses. However, if she had no tax 
liability, which is often the case with lower income workers, she would 
not be able to receive a refund for her expenses. Under my legislation, 
Elaine would be eligible for a refundable tax credit of $2,080.
  This legislation will make child care more affordable for Elaine's 
family and other working families of our country. I ask my colleagues 
to join with me in support of updating this tax credit so more families 
can benefit.

                          ____________________