[Congressional Record (Bound Edition), Volume 153 (2007), Part 4]
[Extensions of Remarks]
[Pages 5944-5945]
[From the U.S. Government Publishing Office, www.gpo.gov]




          INTRODUCTION OF THE PARENTS' TAX RELIEF ACT OF 2007

                                 ______
                                 

                             HON. LEE TERRY

                              of nebraska

                    in the house of representatives

                        Thursday, March 8, 2007

  Mr. TERRY. Madam Speaker, I rise today to introduce the Parents' Tax 
Relief Act of 2007 to strengthen families and empower parents in 
providing the best possible care for their preschool children. Senator 
Sam Brownback is introducing similar legislation in the Senate today.
  This comprehensive legislation will enact family-friendly tax 
policies to provide parents with more child care options. It will end 
the long-standing inequity in the tax code that encourages daycare 
above stay-at-home parenting. It will also help parents spend more time 
with their children by encouraging flexible employment opportunities 
such as home-based businesses and telecommuting jobs, while ensuring 
that parents who take time out of the workforce to care for their 
children will not be penalized under the Social Security system.
  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. Congress has helped this situation with 
common-sense measures such as the child tax credit, but more should be 
done.
  In addition, many parents need to remain in the workforce for 
financial or other reasons. Flexible work opportunities such as 
operating a home-based business or full-time or part-time telecommuting 
would empower working parents to spend more quality time with their 
children.
  Parents perform a tremendous balancing act between work and family 
responsibilities. It can be difficult for families to survive without a 
second income. While the second earner's income in a family can go 
toward daycare costs and work-related expenses such as dry-cleaning 
bills and gasoline, it can also support necessities such as grocery 
bills, medical expenses and savings for a child's future education. 
Parents should be empowered with greater options for raising a family 
on a limited income, whether one or both parents are in the workforce.
  The legislation that I am introducing today addresses the needs of 
modern families while empowering parents with greater choices. 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. In 
addition, parents would have greater opportunities for ``split-shift'' 
parenting and other options to ensure their children have the best 
possible care and time together as a family.
  It is clear that parents want these options. A comprehensive study on 
balancing work and family, which was conducted by four major charitable 
foundations, found that 70 percent of parents believe the best 
arrangement for the care of young children is to have one parent at 
home. 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 judgment of parents, especially regarding 
the care of preschool children. The Parents' Tax Relief Act, which I am 
introducing today with more than 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 currently 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 doubles the personal income tax exemption to 
half of its original 1948 value, from $3,300 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 of 2007 will extend marriage tax 
relief to all tax brackets to prevent the government from discouraging 
marriage or forcing both parents into the workforce. It will also end 
the marriage penalty in the tax deduction for student loan interest, 
which currently limits married couples filing joint returns to a $2,500 
deduction, even though $2,500 is the amount each spouse holding student 
debt could have claimed while single.
  Fifth, this legislation will support parents who operate a home-based 
business. The bill establishes a standard home-office tax deduction to 
replace complicated IRS regulations that prevent many small business 
owners from

[[Page 5945]]

deducting legitimate expenses. The Congressional Budget Office 
estimates that nine million of the 17.3 million small business in the 
United States are home-based, and 55 percent are operated by women. 
Many home businesses are started to provide a secondary income, which 
is very helpful to families with children.
  Sixth, the Parents' Tax Relief Act of 2007 encourages telecommuting. 
It will create a Telecommuting Tax Credit allowing employers to deduct 
a portion of a telecommuting employee's wage for income tax purposes. 
It will also allow individuals to exclude from income the value of 
employer-provided computers and related equipment necessary for work 
from home, including critical related services such as broadband 
Internet connection. 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.
  The Parents' Tax Relief Act of 2007 recognizes the realities parents 
face by allowing up to ten years of flexible Social Security employment 
credits for parents who stay at home to raise children age six and 
under. Public policy should 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 expand choices for parents with 
children. The Parents' Tax Relief Act of 2007 will address the needs of 
modern families, including those who want to stay at home with their 
children without decimating their family finances, and those who want 
to continue working and contributing to family income while spending 
more time with their children.
  I urge my colleagues to support choices for families by cosponsoring 
the Parents' Tax Relief Act of 2007 today.

                          ____________________