There are countless blessings for those starting a family, but the financial responsibility can be a challenge for any working parents.
We are both mothers who have a combined five beautiful children. Raising our kids has given us incredible joy and they are the reason we are in Congress today.
When incomes are stagnant and prices for just about everything continue to rise, families have little left or sometimes nothing at all to save for their children. Parents today are frustrated and nervous about the future of their family.
This week, the House is considering sensible steps to help parents keep more of their hard-earned money to use for the mounting expenses of parenting and help save for the costs of a college education.
First, we can expand and update the child tax credit to keep up with the cost of living. The current child tax credit fails to take these increased costs into account because the credit is not indexed for inflation and has remained at $1,000 per child since 2004.
A recent study by the U.S. Department of Agriculture estimated that for a middle-income family it will cost over $241,000 to raise a child until age 18. This is an increase of almost 10 percent since the last time the child tax credit was updated.
Under the Child Tax Credit Improvement Act of 2014, the amount of the child tax credit would be indexed for inflation, so the real purchasing power of the credit does not depreciate over time.
As the law stands today, two unmarried parents actually get a bigger tax benefit than two married parents.
Our bill removes the marriage penalty embedded in the current tax credit and increases the income level at which the child credit begins to phase out from $110,000 to $150,000 for married couples – which is twice the level for single filers.
Indexing for inflation has become a well-known part of our tax system and there is a reason for that - fairness.
The lack of indexing a particular provision to inflation means that provision is worth a little bit less to taxpayers every year. In the case of the child tax credit, this means working families.
This legislation essentially removes the annual hidden tax placed on working families and recognizes that a dollar in 1997, in 2004 is not the same as a dollar in 2014.
Second, we can simplify education tax benefits by streamlining the number of education provisions and reworking those that are most effective to allow us to simplify the code and reduce some of the confusion that exists today.
Currently, there are 15 different tax breaks for education. Four are designed to help individuals save prior to becoming a student, nine are available while the student is in school and two exist for when the student has completed his or her education.
This is overwhelming and confusing and trying to navigate the 90 pages of IRS instructions to apply for these tax credits often leads parents and students to simply give up out of frustration.
By passing the Student and Family Tax Simplification Act we can consolidate four existing education provisions -- the Hope Credit, the American Opportunity Tax Credit, the Lifetime Learning Credit, and the tuition deduction -- into a single, modernized and strengthened AOTC.
Streamlining the number of education provisions and retooling those that are most effective allows us to simplify the code and reduce some of the confusion that exists today.
As a result, students can spend less time figuring out how to finance the cost of a higher education and more time developing the skills they need to succeed in our knowledge-based economy.
After all, with the cost of education continuing to climb, for too many, the ability to save and pay for college without ending up under a mountain of debt is out of reach.
Today’s broken tax code does little to ease that financial burden or provide a sense of security that education will be a reality in the future.
The Student and Family Tax Simplification Act and the Child Tax Credit Improvement Act are real solutions that will have real results to improve the quality of life for working families.
Our commitment is and always has been to build a healthy economy that creates opportunities for working families. We understand that our economy succeeds when families succeed.Rep Lynn Jenkins, R-Kan., introduced the Child Tax Credit Improvement Act and Rep Diane Black, R-Tenn., introduced the Student and Family Tax Simplification Act. Both members serve on the House Committee on Ways and Means.