Welcome to The Taxpayer's Tab -- the weekly newsletter for up-to-the-minute research from the National Taxpayers Union Foundation's BillTally Project. For more information, check out NTUF's BillTally Project and our partner, WashingtonWatch.com!
Most Expensive Bill of the Week
The Bill: S. 56, the Right Start Child Care and Education Act of 2013
Annualized Cost: $1.8 billion ($9.2 billion over five years)
The federal government currently provides certain tax benefits for parents to enroll their children in child care services. The child and dependent care credit can be claimed for children under the age of 13 or by households with one or more parents that are physically or mentally disabled. The credit is intended to provide relief to parents by exempting some of their child care expenses from their federal tax return. Employers are also able to receive tax credits if they provide workplace child care for their employees.
Re-introduced by Senator Barbara Boxer (D-CA), the Right Start Child Care and Education Act would make changes to these credits to increase the accessibility and encourage the use of child care. S. 56 would increase two tax credits related to the provision of child care. Workplaces would be eligible to claim up to $225,000 per year, up from $150,000, if they establish or continue to have employee child care facilities. Additionally, the Act would create a new credit of up to $3,000 for three years for individuals going to school or who are professionals in the field.
Senator Boxer’s bill would also double the child and dependent care credit for one child from $3,000 to 6,000. Moreover, the credit would be made refundable. This would enable filers to claim the full amount of the credit regardless of their income tax liability.
In 2009, while introducing a version of this legislation in the 111th Congress, Senator Boxer said that "[i]n this difficult economic environment, it is more important than ever that we make sure that parents don't have to choose between working and taking care of their children. This legislation is designed to help families pay for a very important service, and I want to ensure that the care that is received is top quality."
According to a 2007 report by the Tax Policy Center, making the dependent care credit refundable would increase federal spending by $9.2 billion over the first five years. Making the credit refundable would result in government spending because an individual could get more money back than they paid in taxes. There are no offsets included in the proposal.
To learn more or discuss this bill visit WashingtonWatch.com.
The Bill: H.R. 523/S. 232, the Protect Medical Innovation Act of 2013
Annualized Savings: "No Cost" -- Revenue
Number of Cosponsors: 187 House Members and 28 Senators
On January 1st of 2013, a 2.3 percent tax on the sale of medical devices went into effect. The tax, a provision of the Patient Protection and Affordable Care Act (ACA), applies to all medical products specified as a "taxable device" by the Food and Drug Administration. Taxable items include pacemakers, tongue depressors, oxygen tanks, and potentially even latex gloves. There are some exceptions, such as eyeglasses, contact lenses, hearing aids, and certain devices purchased at retail for individual use.
As some within the medical industry voice concern over the new tax, Congressman Erik Paulsen (R-MN) and Senator Orrin Hatch (R-UT) introduced the Protect Medical Innovation Act to repeal the tax. "Placing a new tax on the backs of U.S. medical innovators and entrepreneurs who employ more than 400,000 Americans is not a prescription for economic growth or job creation," Representative Paulsen said upon introducing the bill. "Repealing the medical device tax eliminates barriers to medical innovation, ensuring patients have access to life saving technologies and reduces the burden on tight [research and development] budgets, spurring job growth in the industry."
Under NTUF's BillTally methodology, legislation that only affects tax revenue is considered as "no cost" to spending. H.R. 523, as introduced, falls under this category.
A bill introduced by Senator Scott Brown (R-MA) in the previous Congress, S. 262, was also proposed to eliminate the medical device tax established by the ACA but included a $39 billion rescission of federal spending to offset the loss in expected tax revenues over ten years. NTUF scored that bill as a $3.9 billion annualized savings.
H.R. 523's cosponsors include 166 Republican and 21 Democratic Members. Currently, 24 Republicans and four Democrats support S. 232.
To learn more or discuss this bill visit WashingtonWatch.com.
The Wildcard: Sports Edition!
The January 24th edition of the Tab highlighted a bill named for Muhammad Ali. Below is some other sports-related legislation from the 113th Congress:
The Bill: S. 203, the Pro Football Hall of Fame Commemorative Coin Act
Annualized Cost: "No Cost" -- Costs Offset
Senator Rob Portman (R-OH) sponsored S. 203 to direct the U.S. Mint to manufacture up to 1.2 million new individual commemorative coins ranging in denominations from $.50 to $5. The coins would "support the legacy that the [Football] Hall of Fame preserves and recognize the ways that sports gives back to our communities." Located in Canton, Ohio, the Hall of Fame is where professional football players are enshrined based on their performance on the field.
The bill would spend tax dollars to design and manufacture the coins but the surcharges (counted as offsetting receipts) and revenue from their sale would likely offset the costs. Once the startup costs are recouped, the government would transfer further proceeds from the sale of the coins to the Hall of Fame in order to finance the expansion of its facilities.
The Bill: H.R. 420/S. 166, to designate the new Interstate Route 70 bridge over the Mississippi River connecting St. Louis, Missouri and southwestern Illinois as the "Stan Musial Memorial Bridge"
Annualized Cost: "No Cost" -- Name Change
Baseball legend Stan Musial passed away this January. This pair of bills, sponsored by Congressman Rodney Davis (R-IL) and Senator Claire McCaskill (D-MO), would rename a bridge in his honor.
If enacted, the proposal would have a negligible impact on the federal budget.
The Bill: H.R. 215, the Baseball Diplomacy Act
Annualized Cost: "No Cost" -- Visas
The bill would lift restrictions in order to permit visas to be issued to Cubans to play professional baseball in the United States. The visas would last for the duration of the visa-holder's contract to play baseball, and the holder would be allowed to remain in the United States "only for the duration of the baseball season." The legislation is not expected to affect federal outlays. The bill was introduced by Congressman Jose Serrano (D-NY).
To learn more or discuss S. 203, H.R. 420/S. 166, and H.R. 215 visit WashingtonWatch.com.
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