Are Families the Focus of Tax Relief?
BY Joshua Mercer
March 18-24, 2001 Issue | Posted 3/18/01 at 1:00 PM
WASHINGTON — It's tax-cutting season in Washington, and for the Nugent family that might be even more welcome that the beginning of spring.
“Right now we have huge private education loans,” Nora Nugent of Springfield, Va., told the Register. “I'm a stay-at-home mom, so a tax cut would help just to pay the bills.”
Nugent said it's currently difficult making ends meet, raising two children on just one income.
“I'm not expecting to pay no taxes,” she said. “[But] families are the basis of our culture, the founding unit of our society. They should be mindful of that.”
Nugent's comments echo those of the U.S. bishops, who advocated family friendly tax policies in their 1999 document “Faithful Citizenship: Civic Responsibility for a New Millennium.”
Said the bishops, “Marriage as God intended it provides the basic foundation for family life and needs to be protected in the face of the many pressures to undermine it. Tax, work-place, divorce and welfare policies must be designed to help families stay together and reward responsibility and sacrifice for children.”
With an expected surplus of $5.4 trillion over the next ten years, both Republicans and Democrats want to provide Americans with tax relief. The only real questions are how much will taxes be cut, and in what way will they be cut?
President George W. Bush and Congressional Republicans favor a tax cut of around $1.6 trillion, while Democrats support tax relief around the range of $900 billion. Both parties favor doubling the per-child tax credit from $500 to $1,000 and reducing the marriage penalty in the tax code. Republicans also favor a reduction in all tax rates, whereas Democrats want to reduce only the bottom tax rate from 15% to 10%.
Molly Rowley, a spokeswoman for Senate Democratic Leader Tom Daschle (S.D.), said that Democrats don't oppose tax cuts, just the president's proposal.
“There's a surplus. It's largely the result of the hard work of the American people,” Rowley told the Register. “All we're saying is let's make it fair and let's be a little cautious.”
Republicans remain dedicated to providing more tax relief.
House Speaker Dennis Hastert, RIll., said the president's tax plan “will give consumers more money to pay off credit card bills. It will give families more money to pay off high energy bills. It will give parents more money to pay for education expenses.”
The Catholic Viewpoint
Catholic Alliance President Raymond Flynn applauded both parties for focusing on families for tax relief.
“It's a wonderful idea to put money into the working families” Flynn told the Register. “We want people to have the independence to spend more time with their families.”
Flynn added that high taxes often force both parents into the workforce. “Even in good Catholic families, the mother has to leave the children and enter the workforce and the father has to work two jobs,” Flynn said.
But the migration of mothers into the workforce might actually increase if the president's tax bill passes, some pro-family activists warn. They're concerned that while trying to rectify the notorious marriage penalty in the tax code, legislators may inadvertently provide stay-at-home mothers with an incentive to enter the workforce.
Under current law, married couples on average pay an additional $1,400 in taxes because of a quirk in the tax code that charges married people more than if they were two single people filing separate tax forms.
The president's plan would alleviate much of the marriage penalty by allowing the second earner to deduct 10% of income, up to $30,000.
“Such a shift in the tax code would be economically regressive, primarily benefiting comparatively affluent, two-earner couples,” wrote Allan Carlson and David Blankenhorn in The Weekly Standard. “By encouraging spouses to join the labor force, and by shifting a greater share of the total tax burden onto one-earner couples, such a law would create greater disincentives for at-home motherhood.”
To avoid such an outcome, Stephanie Mollins, Congressional liaison for the Family Research Council, hopes that President Bush will work to reduce the marriage penalty while also providing tax relief for stay-at-home mothers.
“We think it's a very good bill overall. We're very excited about the doubling of the per-child tax credit,” Mollins told the Register. “We still have concerns with the marriage penalty relief, though.”
Too often when politicians tinker with the tax code, they forget about the importance of parents who stay at home with their children, Mollins said. She cited the $500 childcare tax credit signed into law a few years ago — a tax credit for which stay-at-home mothers are ineligible.
That reflects a typical Washington attitude, Mollins said: “Home economy isn't added to the economy when they figure the Gross Domestic Product.”
Joshua Mercer is based in Washington, D.C.
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