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Trump Tax Outline Mentions Tax Relief for Child Care, But Offers No Details

By Christina A. Samuels — April 26, 2017 3 min read
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Child-care tax relief is still on the agenda of the Trump White House.

But the form that tax relief might take is still unknown after Treasury Secretary Steven Mnuchin and top economic adviser Gary Cohn unveiled several bullet points Wednesday that had been sold by the president as a “big announcement’ on tax reform.

The bullet point for child care read, in total: “Providing tax relief for families with child and dependent care expenses.”

Administration sources told the Washington Post that the White House was moving toward expanding the Child and Dependent Care Tax Credit. The source said that the White House is also considering making the credit refundable. That would allow low-income families to benefit even if they don’t have any federal tax burden.

Though the White House did not spell out any details today, Trump has talked about child-care affordability before as a candidate. The proposed changes that he has promoted include:

  • A child-care rebate for low-income families that don’t pay taxes, delivered through an increase in the Earned Income Tax Credit;
  • A dependent-care savings account allowing families to save $2,000 a year pretax, with up to a $1,000 contribution from the federal government for lower-income families;
  • What it calls a more-favorable regulatory environment for “family-based and community-based solutions,” rather than center-based care; and
  • Incentives for employers to provide child care and six weeks of paid maternity leave for women who have given birth, paid for through the unemployment-insurance system.

Trump’s interest in child-care affordability is said to be driven by his daughter, Ivanka Trump, a White House adviser Ivanka Trump. She discussed the topic this week in Berlin at a forum for women leaders.

“The reality is in the United States, the single largest cost in over half of American households is child care, even exceeding the cost of housing. So it’s an enormous problem, and one my father is very committed to tackling,” she told the audience.

(Politifact, while supporting Ivanka Trump’s assertion that child-care costs are high for many families, could not find evidence that it is the single largest cost in over half of American households.)

Early-childhood advocates used the latest announcement to promote their own tax reform plans that they said will help make child care more affordable.

“A strong, bipartisan child-care tax plan should make the tax code more inclusive of early learning, expand the size of existing credits, and make the credits refundable for low-income families,” said Kris Perry, the executive director of the First Five Years Fund, in a statement. FFYF has released its own “Tax Proposals That Support Working Families” document.

The Save the Children Action Network, another organization that is promoting tax reform ideas aimed at child-care affordability, stated that reform efforts should be centered on low-income families.

“Any tax reform designed to make child care and early learning more accessible must focus on the poorest children who lack an equal opportunity to succeed,” said Mark Shriver, the president of SCAN, in a statement.

The tax reform outline was sharply criticized by Patty Murray, the top Democrat on the Senate Education committee. “If Republicans think they can get away with offering workers window-dressing in response to huge problems like the astronomically high cost of child care or the fact that so many parents still can’t take a day to care for a sick child without losing pay, they are sorely mistaken. These are serious challenges that require serious solutions—and President Trump and Republicans haven’t even come close,” she said in a statement.

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A version of this news article first appeared in the Early Years blog.