[Congressional Record Volume 151, Number 87 (Monday, June 27, 2005)]
[Extensions of Remarks]
[Pages E1358-E1359]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              INTRODUCTION OF THE PARENTS' TAX RELIEF ACT

                                 ______
                                 

                             HON. LEE TERRY

                              of nebraska

                    in the house of representatives

                         Monday, June 27, 2005

  Mr. TERRY. Mr. Speaker, I rise today to introduce the Parents' Tax 
Relief Act, PTRA, to empower parents who choose to stay home with their 
children.
  This legislation will end the longstanding inequity in the Tax Code 
that encourages day care above stay-at-home parenting. It will also 
help parents to spend more time with their children by encouraging 
flexible employment opportunities such as home-based businesses and 
telecommuting jobs.
  Congress should recognize and support the incredible sacrifices 
parents make to raise their children. I have heard from Nebraska 
families who struggle to make ends meet so one parent can stay at home 
and provide the love, care and attention that every child deserves. The 
high Federal tax burden, which falls most heavily on the middle-class, 
has unfortunately made this option extremely difficult, if not 
unreachable, for many families.
  Parents perform a tremendous balancing act between work and family 
responsibilities. It can be difficult for families to survive without a 
second income, much of which goes towards day care and work-related 
expenses such as dry-cleaning bills and gasoline, but which can also 
support grocery bills, medical expenses and savings for a child's 
future education.
  Greater tax relief will make it a more realistic option for parents 
to stay at home with their little ones in the early formative years 
that are so crucial to children's physical, mental and emotional 
development. The legislation that I am introducing today will improve 
options for parents to contribute to family income while staying at 
home for their children, including home-based businesses and 
telecommuting jobs.
  It is clear that parents want these options. A comprehensive study on 
balancing work and family, conducted by four major charitable 
foundations, found that 70 percent of parents

[[Page E1359]]

believe the best arrangement for the care of young children is to have 
one parent at home. An ABC News poll last month showed that 77 percent 
of parents agree that while it may be necessary for a mother to work 
and contribute to family income, it would be better if she could stay 
home to care for the house and children.
  In a parenting survey done for Warner Books, 87 percent of mothers 
said they would stay at home to raise their children if they could 
afford it. The Family and Work Institute reported that 70 percent of 
working parents feel they lack enough time with their children, and 
nearly two-thirds of all workers would reduce their work hours by an 
average 11 hours a week if they could.
  In addition, 62 percent of parents with preschoolers want 
policymakers to concentrate on making it more affordable for a parent 
to stay at home during a child's first few years than on improving the 
quality and affordability of day care. In fact, 53 percent of parents 
preferred direct tax cuts to stay-at-home-parents, while only 1 in 3, 
33 percent, would cut costs for families using day care. Members of 
Congress should trust in the judgement of parents, especially regarding 
the care of preschool children.
  The Parents' Tax Relief Act, which I am introducing today with a 
dozen original cosponsors, contains seven major tax improvements to 
empower parents and strengthen families in America:
  First, this legislation extends the Dependent Care Tax Credit to 
parents who choose to be at home with their children. Established in 
1954, this credit allows families to claim up to 35 percent of $3,000 
in documented, non-parental child care costs, and 35 percent of $6,000 
in day care expenses for two children. Families who make the financial 
sacrifice to have one parent stay at home for their children should 
also benefit from this tax credit.
  Second, the Parents' Tax Relief Act will make the $1,000 child tax 
credit permanent and index it to inflation to retain its long-term 
value. This tax relief is critical for Nebraska families with dependent 
children.
  Third, this legislation will double the personal income tax exemption 
to half of its original 1948 value, from $3,100 to $5,000. From 1948 to 
1963 when this exemption was equivalent to $10,000 in today's 
inflation-adjusted dollars, America witnessed a ``marriage boom,'' a 
``baby boom,'' and a decline in the divorce rate. There is evidence 
suggesting these outcomes were significantly advanced by federal tax 
policy to strengthen families. Doubling the personal income tax 
exemption provides critical support to families with children, as well 
as elderly or disabled dependents.
  Fourth, the Parents' Tax Relief Act eliminates the marriage tax 
penalty once and for all. This penalty discourages the sacred 
institution of marriage by unfairly taxing married couples filing 
jointly at a higher rate than two single individuals earning the same 
income. The 2001 tax cut law reduced this penalty by doubling the 
standard deduction for joint filers, and doubling the size of the 15 
percent tax bracket for married couples. Unfortunately, these reforms 
will expire by 2010, along with the rest of the tax cuts enacted by 
Congress. The Parents' Tax Relief Act will extend marriage tax relief 
to all tax brackets to prevent the government from discouraging 
marriage or forcing both parents into the workforce.
  Fifth, this legislation will support parents who operate a home-based 
business in order to spend more time with their children. The bill 
establishes a standard home-office tax deduction to replace complicated 
IRS regulations that prevent many small business owners from deducting 
legitimate expenses. The Congressional Budget Office estimates that 
nine. million of the 17.3 million small businesses in the United States 
are homebased, and 55 percent are operated by women. Many home 
businesses are started to provide a secondary income.
  Sixth, the Parents' Tax Relief Act encourages telecommuting for 
families with young children. It will create a Telecommuting Tax Credit 
allowing employers to deduct a portion of a telecommuting employee's 
wages for income tax purposes. It will also support President Bush's 
budget request to allow individuals to exclude from income the value of 
employer-provided computers and related equipment necessary for work 
from home. Telecommuting is one way mothers or fathers can stay at home 
with their children while still contributing to family income.
  Finally, the Parents' Tax Relief Act protects the Social Security 
benefits of women or men who choose to stay-at-home with preschool 
children. When a parent leaves the workforce to be at home with a 
child, the family's finances may not only suffer, but career 
opportunities and future earnings potential may be diminished. Parents 
who stay at home to care for children during prime working years may 
also jeopardize their future Social Security benefits--especially in 
the unfortunate case of disability or divorce.
  The Parents' Tax Relief Act addresses the realities stay-at-home 
parents face by allowing up to 10 years of flexible Social Security 
employment credits for parents who stay at home to raise children age 
six and under. Public policy should recognize and safeguard stay-at-
home parenting as valuable work that contributes to the character and 
security of our Nation.
  These seven tax improvements will empower parents and strengthen 
families. The Federal government must not tax parents out of their 
homes at the expense of children. I am pleased to note that Senator Sam 
Brownback is introducing this legislation in the other Chamber. It is 
my hope this bill will address the needs of modem families who want to 
stay at home with their children without decimating their family 
finances.
  I urge my colleagues to support families by cosponsoring the Parents' 
Tax Relief Act today.

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