According to Republican presidential nominee Donald Trump, his administration intends to help American families with child care. Some households today pay more for child care than they pay for rent or college tuition, and Trump says it is time to do something about these high costs. He recommends a big tax break.
In a new plan, reports CNN Wire, Trump would allow families to exclude child care expenses on their tax returns. The candidate had no details about the plan, but his message was that he was family friendly.
Currently, parents are allowed to deduct a maximum of $6,000 for child care expenditures for two or more of their kids from their federal income taxes.
"Who would have thought the Trump campaign would feel they've got to get in the game of supporting policies around working families?" says Victoria Budson, executive director of the Women and Public Policy Program at Harvard's Kennedy School of Government. "This could be quite significant."
Trump's opponent, Hillary Clinton, has campaigned as a champion of children, creating a kind of âmom-in-chief' persona. Trump seems to be positioning his child-centered plan to be considered pro-children and families. His idea, he claims, would generate significant savings for parents who work.
"This is helpful to the middle class, not to the working poor," says Budson.
If Trump is referring to a tax credit, that would be a help to a working class family, who often do not pay federal taxes, because the child care costs could be refunded to the households by the government. But if Trump is talking about a tax deduction, that means deducting expenses for daycare for young ones' under the age of 13, and it is not refundable.
Clinton has said she wants to limit child care payments to 10% of a family's income. She is also pushing for paid leave for new parents and preschool for all four year-olds in the country.
Child care may be gearing up to become a hot issue in the presidential campaign. The costs are increasing at almost twice the rate of inflation since the end of the recession. Even though steady hiring has taken place for years and unemployment levels are declining, many families with children are fighting an uphill battle, reports Eric Morath for The Wall Street Journal.
Heather Long of Graham Media Group notes that there is an issue of how Trump plans to pay for the tax deduction. Over the coming five years, child and dependent care credits will cost $24 billion, say government estimates. Because Trump wants to raise the benefit, the price tag will become higher.
Stephen Moore, a conservative economist who is a Trump adviser, said the candidate has not yet worked out the specifics or settled on the details of the plan. Moore did say that it was probable that families reporting between $30,000 and $100,000, or possibly $150,000 annually in income, would qualify for the deduction.
According to Nicholas Riccardi and Lisa Lerer of The Associated Press, Trump's deduction would likely apply to care such as live-in nannies. Exemptions, however. would only apply to the average cost of child care in the families' states. Katie Hamm of the liberal Center for American Progress said:
"When you look at the families that are feeling the biggest pinch from child care costs, they're not included here."