Child care tax credit doubles in Obama plan: Is it enough?
By Rachel Weiner
One of the proposals President Obama unveiled Monday to help struggling middle-class families has caught the attention of mommy bloggers and members of the public alike, according to Google Trends -- nearly doubling the child care tax credit for families making under $85,000 a year.
Obama will push to increase the credit rate from 20 percent to 35 percent for families making under $85,000 a year. Families making from $85,000 to $115,000 also would see an increase in their tax credit.
Response from liberal policy professionals, who might have been expected to hail the proposal, so far has been mixed. Heather Boushey and Joan C. Williams noted in a report for the Center for American Progress that the current tax credit offers most families "only a small annual subsidy" and does nothing for low-income families who "often don't earn enough to benefit significantly from or even receive the tax credit."
That's something the Obama proposal is unlikely to change, CAP's ThinkProgress blogger Matthew Yglesias notes, as the expanded tax credit would not be refundable. That means families with lower incomes would not get extra money back on their tax refunds.
"[M]aking it non-refundable -- i.e., useless to poor people -- considerably reduces its substantive merits," he wrote.
Said Boushey: "It's a great start but it's not enough."
During the presidential transition, Obama released a plan that would "provide low-income families with a refundable tax credit to help with their child-care expenses" -- a more aggressive posture than he is now taking.
January 25, 2010; 7:08 PM ET
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