Donald Trump will announce in a major economic speech on Monday that childcare payments will be fully tax deductible under a Trump administration, a senior aide told The Hill on Sunday night.
“We’re going to help working parents by making childcare payments fully tax deductible.
“That’s new policy,” the aide added.
Mind you, we don’t know how he plans to pay for this, or any other details. But on the face of it, a tax deduction for child care is something Democrats have been pushing for since forever. It’s a good idea, but one which is completely at odds with the Tea Nut rhetoric about “simplifying our tax code” and all that.
One of the most reliable complaints from conservatives has always been how complicated our tax code is. They bring it up every April: the moaning and rending of garments over how hard it all is, wouldn’t it be easier to just have everyone play 10% and be done with it?
The problem with that argument, as I wrote back in October, is that the hard part isn’t figuring out what you owe, it’s figuring out what you earn. And that’s because of all of the various deductions which lower one’s taxable income. Deductions for state and local taxes, mortgage interest, medical expenses, IRA contributions, charitable donations, etc. There are an awful lot of those, and as former Federal Reserve vice chairman Alan Blinder wrote:
Every tax “gimmick” has an ingrained constituency. I shake my head in disbelief when I hear politicians claim to be able to raise huge amounts of revenue by closing loopholes. Arithmetically, that’s easy. Politically, it’s almost impossible.
So here comes Donald Trump to give us yet another “gimmick” with a very large ingrained constituency: families with children. I happen to think it’s a good idea, but I’m not the one complaining about how hard everything is and how we need to simplify everything by reducing the number of allowed deductions.
And as it happens, Republicans have been working very hard to do just that these past few years. In 2014, Republicans tried to repeal a host of popular tax breaks, including the existing Child Tax Credit. The Tax Reform Act of 2014 died a quick death, but the new GOP tax reform plan, unveiled just about a month ago, goes even further than the last reform effort: it eliminates all itemized deductions save mortgage interest and charitable contributions.
It appears Trump’s plan to add a new itemized deduction would be killed by the Republican’s own tax reform plan. How is it possible that the Republican presidential candidate is proposing a tax gimmick completely at odds with the GOP’s tax reform plan released just last month? And would he sign the GOP’s tax reform plan if it didn’t include his child care tax credit? Dying to know.