How the Trump and Clinton child care plans stack up
Donald Trump on Tuesday proposed universal paid maternity leave and new subsidies for child care, departing in some ways from Republican orthodoxy. In most respects, his plan is significantly less generous than what Hillary Clinton has called for, and both are far less expansive than the benefits offered by most developed nations.
Here is a look at Trump’s plan, and how it stacks up.
What is Trump’s maternity leave proposal?
Trump’s plan would, for the first time, guarantee working mothers in the United States paid leave from their jobs when they give birth or adopt.
He proposed requiring employers to give six weeks of maternity leave, with payments made by the unemployment insurance system.
New mothers would be paid the same amounts they would collect in unemployment benefits if they had been laid off, which is usually a small fraction of a person’s usual wages and varies enormously from state to state. The maximum unemployment benefit ranges from $240 a week in Arizona to $722 in Massachusetts.
Many companies already provide paid maternity leave, but lower-income workers and people who work for smaller employers are far less likely to have that benefit.
How does it compare to Clinton’s?
Clinton would require employers to give workers up to 12 weeks of leave to care for a new child, guaranteeing at least two-thirds of their regular salaries. She has said she would pay for it through higher taxes on the wealthy.
Her plan, unlike Trump’s, would also cover new fathers. And unlike him, she would also guarantee paid leave to care for a sick family member.
How does the United States compare to other countries?
Within the Organization for Economic Cooperation and Development, a consortium of 35 countries, including the world’s wealthiest, the United States stands out as the only nation that does not already guarantee paid maternity leave.
Among member countries, the right to paid maternity leave averages 54 weeks, ranging from 12 weeks in Mexico to more than three years in Estonia, Finland, Hungary and Slovakia. In most countries, women collect partial salaries during maternity leave, but the mandated payments can still exceed a year’s salary.
In the United States, the Family and Medical Leave Act of 1993 required employers to allow some employees, both women and men, to take up to 12 weeks’ unpaid leave for the birth or adoption of children, or to care for a sick family member, with the assurance that they could resume their jobs. But barely more than half of all workers are covered by the law, which does not apply to part-time employees or those who work for smaller employers.
Nearly every developed country also guarantees paid job leave to care for a sick child or other family member, unlike the United States. The benefit ranges from several days in some countries to up to three years for very young children in France and no time limit in Spain.
What is Trump proposing on child care?
Trump’s plan calls for several tax benefits for parents.
He would create a new income tax deduction for child care expenses, capped at the average cost of child care in each state. That cost ranges from less than $5,000 a year in Mississippi to about $13,000 in Massachusetts and almost $18,000 in Washington, D.C., according to the Economic Policy Institute.
Stay-at-home parents would qualify for the deduction. Currently, people can qualify for tax benefits for child care expenses only if they use child care to allow them to work or look for work.
Trump called for a new Dependent Care Savings Account program, into which any family could deposit up to $2,000 a year, free of income tax, and receive up to a $500 match from the government. The money could be put toward private school tuition, rather than child care. Unused balances could be rolled over from year to year, and anything left when the child turns 18 could be put toward college expenses.
He also proposed a new rebate for child care expenses for low-income parents, through the Earned-Income Tax Credit, which his campaign said could be worth nearly $1,200 a year per family.
So who benefits, and how much?
Trump’s plan offers significant tax savings to affluent families, and less for middle-income and poor families.
A couple making as much as $500,000 a year would qualify for Trump’s proposed tax deduction, and a deduction is more valuable to a higher-income family, because it pays a higher tax rate. If the maximum deductible expense is $10,000, a middle-income family in the 15 percent bracket will save up to $1,500 on income taxes, but a wealthy family in the top bracket, 39.6 percent, can save up to $3,960.
Low-income families gain little or nothing from a tax deduction, because they pay little or nothing in income tax. So Trump proposed the rebate, effectively a tax credit. (A $1,000 tax deduction means $1,000 of income becomes nontaxable, a benefit that can be worth zero to $396, depending on the taxpayer’s income. A $1,000 tax credit is actually worth $1,000.)
But there already is a Child and Dependent Care Tax Credit, which would remain in place under Trump’s plan. Low-income families qualify for the full amount, up to a maximum of $1,050 for a family with one child and $2,100 for a family with two or more.
Trump’s proposed rebate, available only to low-income families, could be worth nearly $1,200 a family, no matter how many children it has. So for a family with one child, it could be worth a bit more than the existing credit, but for a family with more than one, it would be worth significantly less.
Some employers already offer flexible savings accounts that let parents set aside pretax dollars for child care, though any unused money is forfeited at year’s end. Trump’s plan would allow any earner to have a pretax child care account, and unused money would not be forfeited.
Such accounts work like tax deductions, so once again, the benefit is greatest for the wealthiest. A person in the top bracket who set aside $2,000 would save $792 in income tax and the $500 contribution from the government, while a median family would save $300 in taxes and the $500. For a poor family that pays no income tax, there would be no tax benefit, only the $500.
What Is Clinton’s plan?
Clinton has also proposed “tax relief for the cost of child care to working families,” though few specifics have been laid out. And her plan calls for far more direct government investment, particularly in early-childhood education.
She has called for universal prekindergarten for 4-year-olds, increased pay and training for preschool teachers and doubling spending on Head Start and a related child care program.
What do other countries do?
Government in the United States spends far less on child care and preschool than in most developed countries. Federal, state and local government spending on those services is less than 0.4 percent of gross domestic product. In France, Britain, New Zealand and all of the Nordic countries, the figure is 1 percent to 2 percent.