Federal Deficit Reduction Act of 2005 (Public Law 109-171)
Bush “Taxes” Mothers and Fathers for State Agencies who Assist in the Collection of Child Support
There are hundreds of bills that are passed by Congress that contain “fees” that are just hidden taxes. In 2005, an obscure bill, the Federal Deficit Reduction Act of 2005, imposed a $25 annual fee on the custodial parent who is receiving assistance from the State in collecting child support and their support exceeds a total of $500. At the low-end, this amounts to a 5% tax on this income for the receiving parent. This bill was narrowly approved requiring the Vice President to vote in the Senate to break the tie. This was a bill supported and signed by George W. Bush.
Recognizing that this bill contained about $40 Billion in spending cuts, the child support fee is small potatoes. But, if you are trying to feed your children as a single parent, it can be significant. The bill exempts custodial parents who are part of Temporary Assistance for Needy Families, Aid to Dependent Families, or Tribal TANF which is fine. But, a custodial parent can be living on the edge just barely meeting their financial obligations and the raising of their children and not be on public assistance. These parents fall through the cracks and have to pay the fee.
The underlying issue with this fee is that the parents seeking collection assistance have no choice but to go through their State’s Department of Children Support Services. Typically, when a judge issues an order for compliance, and the defendant does not comply with the order, the defendant is in contempt and the court takes the appropriate action to ensure compliance. In the case of child support, the court has abdicated this duty to the DCSS who can now charge the custodial parent for the collection service. The parent has no other remedy.
The danger with this type of legislative practice is the burying of tax increases or regulations that can ultimately impact individuals and families. The need for more legislative transparency is legendary. Most Congressmen and women have no clue what they are voting for and most Presidents do not read the final bills either. We need to push for more transparency as well as a higher degree of difficulty for Congress to increase fees and taxes. With a $14.5 Trillion dollar deficit, a little sunshine on legislation could not hurt.