Congressman Sensenbrenner Introduces the Working Parents Tax Relief Act to Help Working Families
“Changes to the Dependent Care Assistance Program are necessary to give our hardworking families a hand up and ensure our businesses have a focused, productive workforce.”
WASHINGTON, D.C. – Today, Congressman Jim Sensenbrenner introduced the Working Parents Tax Relief Act, legislation that would amend the Internal Revenue (IRS) Code of 1986 in order to help make the cost of childcare more affordable for Wisconsin families.
Under the employer-sponsored Dependent Care Assistance Program, eligible employees may reduce their taxable income by setting aside money from their paycheck, prior to taxes being taken out, to pay for dependent care expenses, including child care, elder care and extended care.
Currently, individuals may only set aside $5,000 per year and are unable to roll-over unused funds to the next year.
Sensenbrenner’s Working Parents Tax Relief Act would increase the amount available under DCAP from $5,000 to $7,500, index the benefit amount to inflation, and allow plan participants to roll-over unused funds into the following year.
Congressman Sensenbrenner: “The cost of reliable, quality dependent care, especially childcare, has risen dramatically over the years. Changes to the Dependent Care Assistance Program are necessary to give our hardworking families a hand up and ensure our businesses have a focused, productive workforce.”
Background:
- The Dependent Care Assistance Program (DCAP) acts as flexible spending account which can be used to pay for eligible dependent care expenses.
- Expenses must be incurred from the care of dependents under the age of 13, or older dependents incapable of caring for themselves, and must be needed to allow employees to work.
- The money set aside is pretax, which has the effect of lowering an individual’s taxable income. Under current law, each household may set aside up to $5,000 annually. This limit has been in effect since 1986, despite the fact that the cost of care has significantly increased.
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. It has not been verified for its accuracy or completeness.
Mentioned in This Press Release
Recent Press Releases by U.S. Rep. Jim Sensenbrenner
Jim has done moe for working families, Inner city kids, than anyone in Wisconsin except Tommy. He authored Chap 220 so that inner city kids have had a chance to get an education while MPS is national Disgrace.
He has backed School Choice so that Inner city kids could get an education and not have to go to MPS, a left wing run disaster that only is able to teach 15% of the kids in third grade to read.
That’s a small increase and doesn’t even come close to what full-time child care for one child costs per year. Do you have any idea what child care costs WCD? Were your children ever in child care or did your wife stay at home with them?
Vincent, do you think this legislation is a positive step forward and your issue is that it should go even further? Or do you have other solutions that take a different route that may be better?
It isn’t nearly enough to even be a positive step forward. The majority of people benefiting from this are wealthy. Do you know what full-time child care for one child at a decent day care goes for? Average weekly child care expenses for working moms with kids under 15 have shot up 70 percent between 1985 and 2011. Right now a large number of poor families spend 40% of their income on child care. We need serious reform to make child care more affordable. Here’s a start: http://www.urban.org/urban-wire/making-child-care-more-affordable-and-accessible
And this: http://www.vox.com/2014/6/3/5776044/rich-parents-get-the-biggest-child-care-tax-breaks
This is a discussion we should be having more often. The benefits of quality child care and early childhood education are well-known. I obviously want my kids to have great child care, and it bothers me how poorly we pay child care workers. It’s an insanely difficult job. Also high quality child care is hard to find, and depending on where you live can be nearly impossible to find. At the same time, I don’t want our child care costs to go up as they are already extremely high. https://opinionator.blogs.nytimes.com/2013/08/17/crushed-by-the-cost-of-child-care/?_r=0
“Americans face higher childcare costs than parents in almost any other developed country, yet the federal government spends less on childcare than any other nation in the Organisation for Economic Co-operation and Development.”
https://psmag.com/americas-childcare-problem-b175bf10a574#.opnt4ow97
This seems more of a middle class assistance program. Wouldn’t low income families fall under the Wisconsin Shares program?
Admittedly, I’m not really that informed since we’re lucky to have my mother in law to handle most days.
Just a side thought… isn’t the EITC mainly aimed at low income families to help provide food/housing/childcare/etc?
Consider yourself lucky then. It’s about $15,000 a year for one child to attend a decent day care full-time around here. This isn’t going to do anything to really help those who need it most. We need comprehensive reform. Major change. This isn’t it. Makes for a good press release though.
That’s why I said we’re lucky. 😉
But that didn’t answer my question… isn’t the Wisconsin Shares Child Care subsidy aimed at the low income families you’re referring to?
I believe the subsidy is aimed at those families, but I don’t know what the income requirement is or how many people benefit from it or if they are able to access quality day care and not just any day care. That matters. But let’s be clear. I am not just referring to low-income families. I am concerned about them, but not only them. As the links make clear, child care has become insanely expensive for families in the lower and middle-classes. The New York Times story mentions many people who make six figures struggle to afford child care because of how costly it is where they live. This also came up in an NPR discussion from September on the On Point program about the presidential candidates competing child care plans. It’s a serious problem impacting millions of Americans at various income levels.
Maybe there are people that struggle… but the ones I know who struggle also drive newer cars, have more house than me, and tend to take a least one vacation a year. So, in my anecdotal experience, most middle class people who struggle to pay for childcare don’t struggle because of the expense of daycare. (No doubt it hurts, because that’s a lot of money… but priorities are important to keep in mind).
Meanwhile, if you’re low income you have programs like Wisconsin Shares, the EITC, SNAP/TANF/WIC, and many other programs to help with funds for your child.
I’m not saying this because I’m anti reform, I just want to see specifics on the why and how.
Of course your anecdotal evidence holds no weight here. We struggle to pay for child care as do many middle class people we know, which is reinforced by the links I have shared. Read them if you haven’t. Your post acts like there’s no problem here when all of the evidence says otherwise. Person of privilege saying nothing to see here. You and your pals have no problem. Great. You’re lucky. Many aren’t.
Contrary to your statement, many of my “pals” do struggle with it… but they’re also, like I said, living in nicer homes and driving newer cars, etc. But I wasn’t using my anecdotes as an argument against reform, I was just mentioning this as the reasoning to why I don’t really understand it.
Just to clarify, it’s not that I don’t understand the fact that childcare is expensive. The part I don’t understand is how a family who makes… say dual income of $80k, can struggle with it (well, i get it, people have messed up priorities). Are they living in a $140k house or are they living in a $275k house, for example? Again, not to sound like I don’t think it’s a huge chunk of money… but if you can feed, cloth, and generally care for your family and keep a roof over your head, then you’re doing ok.
Here you can read about real people in Wisconsin who struggle: http://www.channel3000.com/madison-magazine/home-and-lifestyle/childcare-costs-pinch-working-families-/158141950
One couple in the story is middle class. Both work good jobs, but two kids in child care is more than one of them makes in a month. That’s how they struggle. And that’s just one common example. You need to read up on this more. You have no idea what you’re talking about.
Also from that story: “Nearly everyone interviewed for this article agrees that the Wisconsin Shares maximum payment is much less than the childcare market rate.”
I believe I said early on that I do not know that much about the subject, and literally all of my posts have been questions… so I think your comment about me having no idea what I’m talking about was both obvious and rude. I was/am seriously trying to learn something here, and so far have read all of your links, but you’re pretty much turning me off to the discussion. I hope others reading this comment thread, who may also be curious, are not as turned off now by it as I am.
In post #15 you are highly skeptical and dismissive. You come across as rude and uncaring. It’s how you often come across here (hence why over time many have accused you of being Mr. Status Quo). You don’t seem to be trying to learn anything as much as cast doubt. Accurate or not, that’s the impression you give.
Well regardless of your perception, this is what I’ve seen and I’m looking for explanations. Your last article was another good example. I found that Madison couple (after doing creepy internet stalking) paid $218k for their house in 2006 thats now worth roughly 40k more… they have probably great equity at this point and could easily find a $150k home and have a tiny mortgage with that equity used as a downpayment. They seem to have a lovely family and do just fine too… based on social media anyway.
Yes, childcare is expensive… but they seem to be doing just fine. Why should others have to pay for them? Are others paying for their childcare even something you were thinking, such as universal daycare? I have no idea, you haven’t said. So I’m not trying to sound like I support the “status quo,” and in fact, I’m not standing in the way of anything because I have no idea what you are suggesting. I don’t even know what “struggling” means really. By struggle, do we mean people are having trouble putting food on the table… or does struggle mean they can’t go to Disney World or does struggle just mean it makes more sense for one parent to take care of their kids instead of work?
If there’s issues with Wisconsin Shares, that’s a different group of people than what this tax credit is aimed at, and a whole new level of discussion.
In fact I did say it, back when you first asked. And I’d say two of those struggles are legitimate.
Based on social media they’re doing just fine. Says you. Wow. You should contact them and tell them to just sell their house already. Problem solved.
Whatever they want to do is their business.. I’m just looking for a case for what we should do to support people who need it, without unnecessarily supporting those who don’t really need it.
Raising the cap on how much childcare is tax deductible and allowing parents to put money away tax free seemed like a good start for how we can help middle class parents… but the way you were talking, it seemed you didn’t think that was a good idea. Just wondering what is a good idea in your mind.