On October 31 US Senator Joni Ernst released the Stop Questionable, Unnecessary, and Excessive Allowances for Legislator’s Act (SQUEAL Act). The Act’s purpose is simple: cut perks for elected officials and make the Washington piggies “squeal.”
Specifically, the legislation would eliminate a provision of the tax code that allows Members of Congress to deduct (for income tax purposes) up to $3,000 in annual living expenses while in Washington DC. Here’s how it works:
- The Code of Federal Regulations defines living-expenses as meals, lodging, and other incidental expenses. Under our current tax code, taxpayers are allowed to claim business-expense deductions for unreimbursed travel expenses incurred while they are away from their principal place of business (“home”). For the purposes of this deduction, a Member of Congress’ “home” is the state or district they represent – not Washington, D.C. where they work.
- Due to this loophole, legislators are allowed to claim deductions for their living-expenses while working in Washington, D.C., even though they spend a significant amount of time working there.
- Senator Ernst’s SQUEAL Act eliminates the provision of the tax code that allows Members of Congress to deduct up to $3,000 in D.C.-based living expenses from their income taxes per year.
Sounds easy enough to implement.
Although the SQUEAL Act’s effect on the US public debt will be invisible, its value lies more in symbolism: why should Congressmen get special tax breaks when so many ordinary Americans are suffering in poverty? It would be nice to see Congress actually live under the same tax regime as do the people they govern.
Perhaps the key to solving Washington’s dysfunction is to force them to live like everyone else—no special health insurance exemptions, no more tax-free living, no more exorbitant salaries.
Also while we’re at it, let’s clean up the US tax code: 90 percent of Americans think that taxes are too complicated, and this costs us big money every year.