SALT LAKE CITY — Sen. Mike Lee, R-Utah, describes the cost of rearing children as a hidden double tax on parents.
Parents carry roughly the same tax burden as childless adults, despite contributing more meaningfully and significantly to the economy by incurring the cost of raising the next generation of taxpayers, Lee said.
"Today’s retirees are funded by today’s workers," he said Monday in interview with the Deseret News. "The children of today will one day be funding tomorrow’s retirees who are today working."
To offset that perceived double tax, Lee said he intends to file the Family Fairness and Opportunity Tax Reform Act, which would grant parents an additional $2,500 tax credit per child.
Salt Lake City resident, Joe Buffington, said he loves to spend time with his son Cameron, and in spite of all the expenses associated with raising a child, he would not describe his son as a burden.
"To be honest, it's the best thing that's ever happened to me," Buffington said.
However, Buffington said that raising children is having tough financially.
"I can say, there's very little money left at the end of the month," Buffington said. "So I mean, making sure his needs are fulfilled, and he has adequate clothing, that kind of thing."
Buffington said he has a hard time putting any money in savings, and he would appreciate the tax break Lee's proposal represents, but he said he could also live without it.
Allison Rowland, Director of Research and Budget at Voices for Utah Children, said that Lee's proposal is laudable for its emphasis on making sure children are emphasized. Rowland said if the bill is meant to be family friendly, it may fall short because it shifts the top rate on income and the alternative minimum tax.
Rowland said the tax proposal also shifts funding for Obamacare which may be better for high income families.
"It looks like he's favoring some families over others, " Rowland said. "And from my point of view, those families already have a lot of advantages written into the tax code."
Rowland said there are other ways to serve families and children better, by emphasizing a living wage, adequate housing and health care.
Lee said the legislation does not yet have a co-sponsor for the proposal, and he has not discussed the bill with Senate leadership.
"We'll just be introducing it. That's typically what one does," Lee said. "One introduces it, makes a pitch and then gathers support."
Lee said the fiscal impact of his proposal is still being determined, and an estimate of lost revenue as a result of the tax credit was not available Monday. But because the proposal would create a more stable, growth-friendly tax code, it could contribute to a more robust economy and greater revenue collection by the federal government, he said.
"Anything you can do to simplify the tax code to make it more fair, to promote economic growth, is ultimately more likely to yield a larger revenue stream than the current antiquated albatross that we have," Lee said. "It’s not really fair to assume that this results in less revenue to the government in the long run."
When asked about the impact the proposed bill would have on the federal budget, Lee said his proposal to increase the per-child tax credit should be debated independent of deficit reduction plans.
"This is a tax reform package," he said. "This has to be debated and discussed on its own merits on the basis of what constitutes good tax policy."
Tim Chambless, an associate professor of political science at the University of Utah and outreach coordinator with the Hinkley Institute of Politics, said Lee's proposal faces an uphill battle.
Rome wasn't built in a day. This is going to be a process that will take some time for us to get support, but we're confident that this is the right way to go.
–Senator Mike Lee
Chambless said the bill would put pressure on the national budget during a time when most lawmakers are looking for ways to trim the deficit and comes late in a year that has been largely dominated by gridlock.
"What really concerns me is the fact that Congress has passed 15 bills this year in 8 ½ months," he said. "None of the main fiscal bills have been passed as we’re coming within two weeks of the end of the fiscal year."
Chambless said a proposal such as Lee's requires scrutiny by Senate committees that likely won't be immediately possible because of time. He also said the political realities are not working in favor of the proposal, which amounts to a Republican-sponsored tax cut in a Democrat-controlled Senate.
"This proposal is something that basically is a press release," Chambless said. "It has no chance of passing under the current conditions."
A tax credit like the one Lee is proposing would have the greatest benefit for large families and would likely be supported most by parents of several children, he said. It would likely be better received in Utah — where demographics place the state above the national average for family size — than other states, where it would appeal only to a minority of parents, Chambless said.
"It would appear that, without having read the bill, the senator is asking people who do not have large families to cover the tax benefit that he’s proposing for large families," he said.
When asked about his optimism for the bill's success, Lee acknowledged there are obstacles ahead, particularly the inertia that surrounds attempts to reform the federal tax code.
"Rome wasn’t built in a day. This is going to be a process that will take some time for us to get support, but we’re confident that this is the right way to go," he said.
"We’re trying to raise this issue and make it an issue that gets some attention in the public debate so that we can get to the point where we can speak of things like this in more than just hypothetical terms. It will take some time, but this is a fight worth fighting," Lee said.