The current federal policies created to benefit families were written more than 65 years ago when dual-income families were not the norm. Today, however, in about two-thirds of married couples, both spouses work.Share
In addition, 70% of mothers with children under 18 work outside the home; so do 64% of moms with kids under age 6. The number of households led by single mothers has doubled in the past three decades, and the majority of these women work in low-paying jobs without flexibility or benefits. My father, in his campaign for president, has proposed a plan to bring federal policies in line with the needs of today’s working parents.
Part one is a rewrite of the tax code, allowing working parents to deduct from their income taxes child care expenses for up to four children, as well as for elderly dependents. This will be capped at the average cost of child care in each family’s state, and the wealthiest individuals will not be eligible for the deduction. The benefit is structured to ensure that working- and middle-class families see the largest reductions in their taxable incomes.
To bring meaningful assistance to lower-income Americans who don’t pay income tax, the Trump plan will offer rebates on child-care spending through the Earned Income Tax Credit (EITC). In a nation where almost two-thirds of mothers with children under age six are employed, child care is an undisputed work-related expense. In business, other such expenditures are tax-deductible. This single reform under the Trump plan will effectively increase the take-home pay for tens of millions of American parents.
And what if one parent staying home to raise the children is the best option for a family? This is the praiseworthy choice of many, yet there’s zero value or recognition by our government for this hard and meaningful work. Under my father’s proposal, stay-at-home parents will receive the same tax deduction as their working peers.
The plan’s second part is the establishment of Dependent Care Savings Accounts, created to aid families in setting aside extra money to foster their children’s development and offset elder care for adult dependents.
These accounts will operate like Health Savings Accounts, with tax-deductible contributions and tax-free appreciation year to year. When established for a minor, funds from a Dependent Care Savings Account can be applied to traditional child care, after-school enrichment programs and school tuition.
To help lower-income parents, the government will match half of the first $1,000 deposited each year. Balances in a Dependent Care Savings Account will roll over from year to year so that a substantial amount of money can be accrued over time.
When established for an elderly dependent, a Dependent Care Savings Account can cover services like in-home nursing and long-term care. The ability to set aside funds will be particularly helpful to women, low-income workers and minorities, who are statistically more likely to reduce time working outside the home in order to provide unpaid care.
The third part of the plan will address the federal regulations that currently discourage informal child-care—such as a mom watching her own kids and a few others in her home. Arrangements such as these are not now given fair consideration by our federal bureaucracy, which is biased in favor of institutional care. We need to create a dynamic marketplace to offer solutions and give parents greater freedom of choice.
Consider parents who work part-time, on a night shift or on call. The standard model of institutional care doesn’t serve these workers: How many day-care centers are open at night? It takes even less account of parents who live in low-income and rural communities.
The fourth part of my father’s plan will add incentives for employers to provide child care at the workplace. Breakdowns in child-care networks cause employee absences that cost U.S. businesses billions each year. On-site child-care centers help resolve avoidable employee absenteeism, in addition to saving time and helping companies retain valued staff.
Finally, under the Trump plan, the federal government will guarantee, for the first time, six weeks of paid maternity leave. This will be done by amending the existing unemployment insurance that companies are required to carry. The enhancement will triple the average paid leave that new mothers receive, and it will do so without raising taxes. (Read more.)