Hidden in the middle of Donald Trump’s big speech on the economy was something rarely spotted in his unconventional campaign: an actual policy proposal.
“My plan will also help reduce the cost of child care by allowing parents to fully deduct the average cost of child care spending from their taxes,” he said.
It wasn’t a detailed policy proposal. But it shows just how much influence Ivanka Trump, the candidate’s daughter, could end up having on Trump’s policies. Last month, Ivanka promised during her convention speech that her father would “focus on making quality child care affordable and accessible for all.”
And now the man who has run an almost entirely policy-free campaign is trying to follow through. But on both the right and the left, his plan is an outlier. Trump is calling for a new federal policy that would help his daughter’s target audience — educated, affluent people from wealthier households — much more than everybody else. This comes as a sharp contrast to Hillary Clinton’s plan, which takes a much more comprehensive approach to the issue.
Ultimately, Trump seems to have tailored his approach to people like him — or, in this case, for people like his daughter: affluent, highly educated, and part of dual-income households. The problem with this approach is that the biggest problems in affording child care come for those at the bottom of the income ladder, something that until now both conservative and liberal plans have acknowledged.
Trump would let families deduct child care from their taxes
Trump’s plan so far is thin on details. But his speech and the documents on his campaign website suggest a plan that would focus far more on wealthier families than poor ones.
In some states, a year at day care for an infant costs more than a year of tuition at an in-state state university. Trump would make the average cost tax-deductible: If you live in Virginia, you could subtract the average child care cost of $10,400 from your taxable income.
This would benefit wealthy families much more than poor ones. Wealthier households pay a higher percentage of their income in taxes. A Virginia household in the highest tax bracket would end up saving more than $4,000 in taxes under Trump’s plan, while a household making $70,000 per year would save just $1,500.
And if you don’t earn enough to owe any income tax at all, a tax deduction does nothing to help you. Trump’s campaign suggested these households could deduct child care costs from their payroll taxes, which fund Social Security and Medicare, instead. But it’s not clear how that would work, and saving a small percentage of an already small income doesn’t offer much concrete help when it comes to paying for day care.
How Trump’s plan compares with Hillary Clinton’s
Right now the federal government help to pay for child care aids middle-income and wealthier families a lot more than the poor.
An existing tax credit — which lowers the amount a household owes in taxes rather than reducing taxable income — can save up to $1,050 for one child in a very low-income household. But the tax credit isn’t refundable, meaning that if you don’t earn enough to owe federal taxes, you’re out of luck. Families who make more than $43,000 qualify for smaller credits ($600 at most for one child or $1,200 for two) but are more likely to earn enough to be able to take advantage of them.
Parents at any income level can also set aside up to $5,000 before taxes to pay for child care in a flexible spending account. Like a tax deduction, this lowers taxable income, but the money is available to spend immediately; you don’t have to wait until Tax Day to get it back.
The sole program for the very poor, meanwhile, is a federal grant program that helps states directly help the poorest families pay for child care. But demand far outstrips funding: About 1.5 million children received these subsidies in 2013, out of more than 9 million who were eligible.
In 2015, Obama proposed eliminating child care flexible spending accounts, tripling the maximum credit for child care, and making it available to households making as much as $120,000 per year. The credit still wouldn’t be refundable, but Obama also called for expanding federal subsidies to help poorer families afford child care directly.
Hillary Clinton wants to cap child care expenses at 10 percent of a family’s income, using both tax credits and subsidies.
Some conservatives, meanwhile, are leery of new programs aimed at households where both parents are working, and of the increased regulation Obama and Clinton have proposed to ensure that child care centers are high-quality. Marco Rubio has proposed increasing the child tax credit and making it refundable, which would provide more money both to families in child care centers and those who have a parent staying home.
All of these proposals have one thing in common: They acknowledge that the current system of helping pay for child care is particularly unfriendly to low- and middle-income families.
Trump’s proposal, seemingly tailored to the needs of women like his rather well-off daughter, is the outlier.
Child care reform is out of character for Donald Trump, but not for his daughter
Affordable child care hasn’t been a top-tier issue for either Democrats or Republicans in the past. And Donald Trump — who has not only run a policy-averse campaign but has been less than sensitive to the needs of women and working families — might seem like the unlikeliest of candidates to embrace it.
Trump bragged about how little he did when his children were small. He’s allegedly said that a woman pumping breast milk at work was “disgusting.” He also seems to misunderstand how day cares even work, suggesting that it’s really not that hard for companies to offer affordable child care to their workers — that a company only needs “one person, two people, and you need some blocks and you need some swings and some toys.”
But it’s pretty obvious where the idea might be coming from. Ivanka Trump, his daughter, is one of his closest advisers. Just as her father’s catchphrase was “the art of the deal,” Ivanka Trump is making a name for herself as a spokesperson for “women who work,” a Lean In–style version of feminism that emphasizes female ambition and work-life balance. During Trump’s economic policy speech, he specifically called her out as someone working with his team of economic advisers.
Ivanka Trump has already influenced her father on supporting Planned Parenthood — though Trump still says he is pro-life, he acknowledges that the organization does “very good work” for women. At the Republican National Convention, Ivanka drew applause and raves for a speech that promised her father would “fight for equal pay for equal work” and make “quality child care affordable and accessible for all.”
Trump’s tax plan suggests Ivanka’s influence extends to policy. But it also shows the limits to her worldview. When Ivanka Trump says “women who work,” she isn’t just referring to any woman who draws a paycheck, but to the kinds of women who buy her $138 dresses: not necessarily rich, but educated, white-collar, and likely part of a dual-income household.
These are also the households that would benefit most from Donald Trump’s plan. Women whose work requires a fast-food uniform rather than an Ivanka Trump dress and heels, meanwhile, are mostly shut out. Ivanka Trump knows her audience. But it’s not yet clear if she’s interested in using her influence to make policy that extends beyond it.