Reform Tax Code with Parents Tax Relief Act

“Let me give you a statistic,” says Allan Carlson, president of the Howard Center for Family, Religion and Society. “Between 1960 and 1984, the average federal tax rate paid by single people did not change, the average federal tax rate paid by married people without children did not change, but the average federal tax rate paid by families with four children went up 223%.” With all the fluctuations, with all the tax hikes and tax cuts, tax rates on many people ended up in the same place in ’84 as they were in ’60—but not on families with children.

Carlson believes the Parents Tax Relief Act (HR 3080, S 1305), recently introduced by Rep. Lee Terry (R.-Neb.) and Sen. Sam Brownback (R.-Kan.), would rectify discrimination against families with children in the federal tax code. “The Parents Tax Relief Act would return us to a 1940s-style system,” says Carlson, who asserts PTRA is the most important pro-family bill to be introduced in decades.

In fact, according to a June 23 statement by Brownback, the federal tax burden on the income of the average family with children has gone from 3% in 1948 to almost 25%.

The anti-family tax code changes “happened in the ’60s and ’70s,” said Carlson. “Feminism, the population control movement…had a lot of influence on the Democratic-controlled Congress. The federal tax burden shifted onto families with children.” With native-born Americans’ birthrate now under replacement level, you would think these sorts of people would change their minds about discouraging fertility, but, said Carlson, “Some people still view the human species as a cancer on the planet and would be happy to see it shrink.”

The centerpiece of the PTRA is its extension of the Dependent Care Tax Credit (DCTC) to stay-at-home moms caring for children under 6. Currently, the federal government transfers money from traditional one-earner families to two-earner families who use day care, allowing them to subtract thousands of dollars per child per year from their taxes in order to pay strangers to take care of their children. PTRA would allow homemakers to use the DCTC, even if they earned income while at home, thus equalizing treatment between mothers in an outside workplace and more traditional mothers. PTRA would also almost entirely eliminate the troublesome marriage penalty. It could even reduce the abortion rate by making marriage and children less expensive.

PTRA, whose primary provisions simply end discrimination against stay-at-home moms and their families, is more achievable in the near term. Other provisions of PTRA include making the $1,000 child tax credit permanent while indexing it for inflation, increasing the personal income tax exemption from $3,100 to $5,000, preserving a few years’ worth of stay-at-home moms’ Social Security benefits when they leave the workforce, and simplifying and increasing tax breaks for home-based businesses and telecommuters.

“There are a lot of mothers—and fathers—who would like to stay home with their kids and telecommute,” Terry told me. “They would like to be there when their kids get home in the afternoon.” Don’t forget the well-worn statistic: Kids are most likely to engage in crime and other risky behavior between the hours of 3 p.m. and 6 p.m. And kids in day care are several times more likely to become seriously ill or develop behavioral problems than kids cared for by their own mothers.

The mothers want to do it: Terry’s office cites the data that show that around 77% of working mothers with young children say they wish they could stay home.

Rep. Jeff Fortenberry (R.-Neb.), an original co-sponsor of PTRA, says, “It’s not something on most people’s radar screen.” It should be. Americans who value families with children should demand congressional consideration of this kind of legislation.