Edward McCaffery: There are many questionable aspects of Donald Trump's revised child care tax plan
Trump's proposed tax breaks are a child, not a child care, tax plan, McCaffery says
Editor’s Note: Edward J. McCaffery is Robert C. Packard trustee chair in law and a professor of law, economics and political science at the University of Southern California. He is the author of “Fair Not Flat: How to Make the Tax System Better and Simpler.” The opinions expressed in this commentary are solely those of the author.
There are many questionable aspects of Donald Trump’s revised child care tax plan, as announced Wednesday in Pennsylvania with his daughter Ivanka by his side, but one point is very easy to make and understand: It’s not a “child care” plan at all.
Trump initially announced last month in Detroit a plan to allow families to “fully deduct” the costs of child care from their income taxes, a proposal roundly criticized as overwhelmingly favoring high-income moms, in high tax brackets, like Ivanka. Tuesday’s much ballyhooed rollout added a bunch of details and new concepts – limitations on the tax deduction for upper-income parents (no benefit for individuals earning $250,000 or more per year, or couples making $500,000 or more), credits for low-income parents who do not pay income taxes, and so on.
But then there is this: The plan extends to stay-at-home moms. “Families with a stay-at-home parent will be able to fully deduct the average cost of child care from their taxes,” Trump said in speech in Aston, Pennsylvania, on Tuesday night. “I’m hearing, ‘Wow!’”
Here’s the issue: If you are helping working moms and stay-at-home moms, you are helping all moms. Moms either work for pay outside the home or they do not. There is no other option. So Trump’s plan is a plan for all moms (it’s unclear if dads can apply; they cannot for the paid maternity leave Trump is proposing). Every mom gets to deduct “the average cost of child care” whether she has child care costs or not. Trump’s proposed tax breaks are based on the fact of having a young child, not working for pay or not. It’s a child, not a child care, tax plan.
There are deep problems with this, as I pointed out in a book I wrote two decades ago, “Taxing Women.” By helping out moms whether they work or not, the plan encourages women to stay at home; there’s no extra break you get from working. That would seem to be the opposite effect of a good child care policy.
Get our free weekly newsletter
And then there’s this: If you are going to help all moms, working or not, why not just mail them a check? Wealthy families could simply pay their child credit back on the tax returns that show their high income. That would be a lot simpler than the manifold changes to various tax laws that Trump is at least hinting at, in a “major overhaul” of the tax code.
But then again, proposing to send an annual check to all moms if elected might just be a little too obvious in revealing Trump’s true intention: to help address his problem with female voters by giving them cash. Other people’s cash, of course.