WMBF Investigates: How Trump’s child care tax proposal would aff - WMBFNews.com, Myrtle Beach/Florence SC, Weather

WMBF Investigates: How Trump’s child care tax proposal would affect local families

(Source: WMBF News) (Source: WMBF News)

MYRTLE BEACH, SC (WMBF) - President Donald Trump is working on keeping the promises he made during campaign season. One that resonates with thousands of people close to home, and millions across the country: the pledge to make child care cheaper.

The president’s plan would allow more working parents to deduct child care costs, it creates tax-free savings accounts and it guarantees six weeks of paid maternity leave. But a report from the Tax Policy Center found the plan will give bigger benefits to families with higher incomes.

It says the more parents make, the more they’ll get back, for the same exact child care service.

“We were a bit struck by how small a component it is of his package, and wanted to make sure the facts were out there,” said Lily Batchelder, a professor of law and public policy at New York University. She’s one of the authors of the report. “Even though it is in there and quite small amount of money for these families. If they’re thinking of this tax reform plan as providing huge benefits because of how much he talks about this piece, they should look at the fine print.”

The report uses hypothetical situations in Michigan to show lower earners benefit little under the administration’s proposal.

We had Batchelder take the same situation and apply it to our area. Child Care Aware says the average family in South Carolina spends $4,657 for child care for a four-year-old each year. Here is what she found:

A married couple each working full time at the minimum wage (earning $30,000 combined) would not be able to claim the existing CDCTC.  Under Trump’s plan, they would be eligible for a refundable credit of $356.

A married couple earning $43,299 would claim their first $3,000 of child care the expenses for the existing CDCTC, worth $600.  Under Trump’s plan, they would deduct their remaining expenses, reducing their tax liability by an additional $199.

A married couple earning $250,000 would be eligible to claim the existing CDCTC worth $600.  Under Trump’s plan, they would instead claim a deduction worth $564 more than their current credit.

“People who are low and moderate income shouldn’t take it as a that his plan overall is going to provide them big benefits,” Batchelder said, “and if they care about child care should be pushing to get the benefits targeted on low and middle income families.”

The report says 70 percent of the benefits from this proposal go to families making at least $100,000.

Fact-checking site Politifact looked over the claims after Representative Nancy Pelosi said the same thing during an interview, and rated the statement true.

Batchelder was majority chief tax counsel for the US Senate Committee on Finance and deputy director of the White House National Economic Council under President Barack Obama. She wants it to be clear, this report is based on the facts and figures, not political slant.

In fact, economist Alan Cole with the Tax Foundation says the Tax Policy Center report may be more precise than his own group’s. He tweeted, “It’s hard to know exactly what Trump’s policy team intended… but the policy TPC assumed probably makes more sense than the one I assumed.”

Related Links:

Link to the report: http://www.taxpolicycenter.org/publications/who-benefits-president-trumps-child-care-proposals/full

Link to SC Child Care fact sheet (Child Care Aware): http://usa.childcareaware.org/wp-content/uploads/2016/07/South-Carolina.pdf

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