Earlier today, the House of Representatives approved the Senate-passed tax reform legislation which will overhaul the tax code for the first time since the mid-1980s. President Trump is expected to sign this bill into law soon.
The bill doubles the Child Tax Credit (CTC), however, only higher income families would receive the majority of the benefit while low-income and working parents will get next to nothing. The Child Dependent Care Tax Credit (CDCTC) is maintained, but not expanded or made refundable. CDCTC is directly linked to the child care costs of working families and expansion of this program would have been of great help. While there is a bi-partisan bill that would expand CDCTC and make it refundable, Congressional leadership unfortunately did not include this benefit in their priorities.
In short, this bill will be extremely harmful to low-income and working class families. According to several estimates from non-partisan tax organizations, this legislation is expected to add $1.5 trillion to the deficit, and Congress will likely work on proposals in 2018 that will attempt to "pay for" this increase by taking funds from Medicaid, Medicare, the Supplemental Nutrition Assistance Program (SNAP), and other programs that are critical to supporting families in need.
In addition, the bill eliminates the Affordable Care Act's Individual Mandate beginning in 2019. According to a recent study, this could result in 13 million people losing access to health insurance.
Low-income and working families should not have to bear the brunt of the negative consequences of a flawed tax bill and Congress should not consider cutting funds from programs that help these families gain access to medical care and food.
Congress and the Administration must work together and prioritize the needs of these families, including extending the Children's Health Insurance Program (CHIP) which expired on September 30. If no action is taken by the end of this year, many states will run out of funds. Passage of a sweeping tax reform bill that only a very small percentage of Americans will benefit from while not funding CHIP is a clear demonstration that both institutions have failed.
Child Care Aware® of America does not support this tax legislation, as our Executive Director, Dr. Lynette Fraga, expressed earlier this month. We look forward to the opportunity to continue to work with Congress and the Administration on policies that would benefit our nation's most vulnerable citizens, but we will not support any efforts that would harm them.