WASHINGTON — When Ivanka Trump introduced her father at last month’s Republican convention, she described a tough-talking deal-maker who also worries about family leave, equal pay for women and the cost of child care.
It’s was one of the first times during Donald Trump’s campaign for president those subjects had come up, which made it all the more notable Monday when the GOP nominee dropped a brief mention of child care into his speech about the nation’s economic future.
“My plan will also reduce the cost of child care by allowing parents to fully deduct the average cost of child care spending from their taxes,” Trump said.
That single sentence was all Trump had to say, other than to promise more details in the coming weeks as he works on his proposal with his daughter.
But it was enough to spark a strong reaction from the campaign of Hillary Clinton, who quickly shot out a press release full of tweets critical of Trump’s mention of the issue.
Here’s a deeper look at what Trump and his campaign have to say about an issue that is increasingly squeezing the finances of American families with children.
WHAT’S TRUMP PROPOSING?
Trump said that under his tax plan, families would be able to deduct the amount they pay for child care from the income they report on their taxes.
Stephen Moore, a conservative economist advising Trump, said the candidate is still working out specifics and hasn’t yet settled on the details of the plan. But he said households reporting between $30,000 and $100,000, or perhaps $150,000 a year in income, would qualify for the deduction.
“I don’t think that Britney Spears needs a child care credit,” Moore said. “What we want to do is to help financially stressed middle-class families have some relief from child-care expenses.”
The deduction would also likely apply to expensive care like live-in nannies. But exemptions would be limited to the average cost of child care in a taxpayer’s state, so parents wouldn’t be able to claim the full cost of such a high-price child care option.
WHAT WILL IT COST?
Neither Trump nor his campaign released a cost estimate for his plan.
Last year, he proposed a plan to cut taxes that outside experts said would add as much as $10 trillion to the nation’s debt over the next decade. He has since revised that proposal, and in Monday’s speech outlined a more modest set of cuts.
But adding a tax deduction for child care will have a cost. Child care is one of the largest expenses a family can incur – a study from the liberal Economic Policy Institute this year found day care costs more than college in 23 of 50 states.
A DEDUCTION AND NOT A CREDIT
Because Trump’s plan is structured as a tax deduction, rather than a tax credit, it would primarily help more affluent households. That’s because more than 40 per cent of taxpayers don’t make enough money to owe taxes to the federal government at the end of the year.
No matter how much they reduce their income for tax purposes by deducting expenses, they still owe nothing.
Families of four living at or below the federal poverty line of $24,000 spend 36 per cent of their income on child care, said Katie Hamm of the liberal Center for American Progress. Families making up to $48,000 spend 20 per cent of their income on child care. Those making more than $48,000 spend only 9 per cent on child care.
“When you look at the families that are feeling the biggest pinch from child care costs, they’re not included here,” Hamm said.
One way to counter that would be to expand the existing Child and Dependent Care tax credit, which covers qualifying expenses or up to $3,000 for one cared-for individual or $6,000 for two or more. Because it’s a credit, those who pay nothing in tax still get that money.
WHAT HAS CLINTON PROPOSED?
Democratic nominee Hillary Clinton has made reducing the cost of child care a centerpiece of her campaign.
She says no family should spend more than 10 per cent of its income on childcare. She has also proposed a tax cut for “working families” aimed at helping them with child care costs, scholarships worth $1,500 a year for 1 million college students with children aimed at defraying child care costs and increase federal funding for on-campus childcare facilities.
Clinton has also proposed universal pre-kindergarten education and double the number of children in Head Start programs, which would relieve some child care needs on parents. She also wants to provide 12 weeks of paid family leave to new parents.
But like Trump, Clinton has offered few details on how she would pay for her plan.