On Monday, September 26, our nation celebrates national “Family Day.” President George W. Bush issued the proclamation creating this relatively new holiday. He praised the family as the seedbed of character. Other politicians have also clambered on board, praising generic “family values” but offering little of substance.

I propose that we celebrate “Family Day” by advancing legislation that finally offers real help for families. The proposed “Parents’ Tax Relief Act of 2005” (HR 3080, S 1305) is the most important piece of pro-family legislation to be introduced in decades. Initially sponsored by Lee Terry (R – NE) in the House and by Sam Brownback (R – KS) in the Senate, this new bill recognizes the value of the parental care of small children and would expand the child care choices of all new mothers and fathers. It affirms marriage as a public good and would restore recognition of the marital couple as an economic partnership.

This bill also recognizes the value of children to the nation and responds to the extra economic burdens faced by young parents. It would reduce conflicts between workplace and home by making it easier for the home itself to be a place for market labor. And the measure recognizes the full-time mother or father as doing publicly valued work, deserving recognition within the Social Security system.

These approaches are distinctly American. Most other developed nations provide state child allowances to parents as offsets to the costs of rearing children. However, this method tends to make families wards of the state and to weaken marriage. In contrast, the “Parents’ Tax Relief Act” uses carefully targeted tax policy measures to enable families to retain more of their own earned income while children are in the home. The record shows that this approach supports family formation and strengthens homes.

Viewed from another angle, this bill would also eliminate serious problems and inequities that have crept into federal tax policy. For example, federal law currently gives a generous tax credit, without income limit, to parents who purchase day care. However, existing policy gives no recognition at all to full-time parental child care which, social science shows, is predictably better for young children. The proposed measure would set things right by granting a tax credit of $250 per month to families that make the financial and temporal sacrifices to provide their preschoolers with such care.

Second, the per-child tax relief provided by the existing personal exemption and the child tax credit are inadequate, well below the relief delivered by the exemplary, pro-child Tax Reform of 1948. This bill would raise the personal exemption for children to $5,000 and would make permanent the $1,000 per child tax credit and index it to inflation. It would also eliminate the most notorious “marriage penalties” still found in the income tax.

Reflecting old assumptions about the need for industrial centralization, federal tax policy continues to favor large central offices and factories over market labor in the home. The “Parent’s Tax Relief Act” would simplify and expand the availability of the deduction for business use of the home and also encourage telecommuting, so helping to reunite work and home.

Finally, the Social Security system fails to recognize the full-time care of small children as real work (even the existing “homemakers” pension has no linkage to children). This bill boldly faces this problem by granting employment credit toward Social Security to parents who make the sacrifices to raise their children, full-time, at home.

Near the end of his Presidency, Ronald Reagan said: “[t]he family is the bedrock of our nation, but it is also the engine that gives our country life….It is the power of the family that holds the nation together, that gives America her conscience, and that serves as the cradle of our country’s soul.” This measure rekindles that spirit, transforming pro-family rhetoric into policy ideas that could make a real economic difference for American families.