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On Monday, at an event in Detroit, Donald Trump announced a series of reforms he believes will help boost the economy.

Among them: a proposal to help lower the cost of childcare by making childcare expenses tax-deductible.


"My plan will also help reduce the cost of childcare by allowing parents to fully deduct the average cost of childcare spending from their taxes," he said, citing his daughter Ivanka Trump as having influenced the proposal.

Using the tax code to lower the cost of childcare sounds good on paper, of course. But in a series of tweets,  Michael Linden, the policy and research director at the Hub Project explained why Trump's proposal turns out not to be so great.

In short, because of the way American tax policy works, the people who need help paying for childcare already have very low tax rates. (In general, tax deductions always benefit wealthier folks with larger tax burdens.) So Trump's policy, while perhaps well-intentioned, would mean more childcare money for wealthier families (like the Trumps), but would little impact on the people who actually need more help paying for childcare.

Here's how Linden explains it:

Child care in particular is probably one of the worst programs to target for a tax deduction, since the expenses don't come on an annual basis. And only folks who take the time itemize their taxes (which isn't most people) would be able to take advantage of Trump's proposal.

The CDCTC refers to the Child and Dependent Care Tax Credit. As the Tax Policy Center has noted, the CDCTC is nonrefundable, covers only some child care expenses, and comes long after expenses have been incurred. (President Obama has proposed fixing this credit by expanding it and making it more useful to low-income families, but his proposal doesn't seem to have gone anywhere.)


But Trump's proposal is much worse than any problems with the existing CDCTC. In conclusion:

Well said.

Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.