Why the 2025 Tax Fight is Critical for Caregiving
By Chad Bolt and Amy Matsui
All of us will need to care for ourselves or a loved one at some point in our lives. Unfortunately, the U.S. does not make this easy. We have no national paid family and medical leave policy, which means more than 70% of private sector workers lack access to paid family and medical leave. The cost of infant care exceeds in-state tuition at a public university in most states, and a family would need to earn $180,000 a year nationally to reasonably afford such care. Similarly, providing care for older and disabled people can cost over $100,000 per year. Yet at the same time, care workers are paid poverty wages that do not allow them to support themselves and care for their own families.
It’s clear that our caregiving system is broken. Yet, policymakers have failed to make the changes and investments to make it work for our families, leaving us to figure out caregiving on our own. This hurts not only women and families, but businesses and our economy as well.
Women are more likely to cut back their work hours or lose their jobs if they don’t have paid leave or aren’t able to find care for children or other family members. Families lose out on billions of dollars in wages and other costs every year, due to a lack of paid leave and child care. When parents don’t have paid leave or reliable child care, it lowers productivity, increases absences, and strains employers, especially small businesses. Overall, the U.S. lost nearly $7 trillion in economic gains over the last decade because our policies fall short of what women and families need–including care.
To strengthen our families and our economy, lower costs for families, and support families in the workforce, we need to invest in our caregiving systems. Some politicians say we can’t afford to invest in care, but we absolutely can–if we stop massive tax giveaways to the wealthiest and big corporations.
Republicans’ tax plan puts billionaires over families
Earlier this week, Congressional Republicans jammed through the House a budget resolution that paves the way for them to deliver more enormous tax cuts to billionaires and corporations, paid for by cutting Medicaid, SNAP, education, and other programs that families rely on. The first step in this process, the budget resolution does not have specific details on tax or spending policy. But we already know enough about their plan to know that the benefit of the tax cuts will overwhelmingly flow to people with the highest incomes, and it will be paid for by slashing essential supports for children and families.
Republicans in Congress are hitting copy+paste on their 2017 tax law – which cost $1.9 trillion and, according to the Tax Policy Center, sent over half of the tax cuts to the top 10 percent of Americans. New provisions that some Republicans want to add would skew this distributional benefit even more to the highest incomes – delivering another $140,000 tax cut to the wealthiest 0.1% of households.
To pay for more tax cuts for billionaires, the Republican budget proposal would slash caregiving supports that families rely on, including Medicaid, the largest source of federal funding to help families afford care for aging and disabled family members. Though they are trying to pretend that’s not what their resolution calls for, there is simply no way to achieve the enormous cuts required by the budget resolution other than to decimate Medicaid as we know it – and it would affect people in every Congressional district. Republicans may also make dramatic cuts to programs like Temporary Assistance for Needy Families (TANF) and the Social Services Block Grant (SSBG) that help fund child care assistance, as well as eliminate the Child and Dependent Care Tax Credit (CDCTC), a nonrefundable tax credit that helps over 5 million families meet out-of-pocket child care expenses each year. There may also be cuts to mandatory child care funding (Child Care Entitlement to States, or CCES).
Taking away help with child care and elder care would raise costs for families who already can’t afford it. Many of these families would also lose nutrition assistance and health care under the Republican budget proposal, squeezing tight family budgets even further. What’s more, women in the underpaid and undervalued care workforce also rely heavily on programs and supports like Medicaid and the food assistance program SNAP to support themselves and their families.Taking those benefits away means that care workers will have an even harder time making ends meet, which may push them out of care professions altogether.
Giving trillions of dollars away to billionaires also means we can’t spend those public dollars on caregiving investments, like a child care guarantee, comprehensive paid family and medical leave, and more public dollars for aging and disability care. And just so we’re clear, tax policies related to care (like the unsuccessful 45S and 45F tax credits or Dependent Care Assistance Plans) ,fall far short of providing comprehensive solutions to the care crisis that work for parents and caregivers, providers, care workers, and the economy. Even tax policies that could help families offset the cost of care (like the Child and Dependent Care Tax Credit) are at best a complement to sustained and robust investments in care.
Families want a tax code that really works for them, not more tax cuts for the top 1%. They don’t want to extend expiring pieces of the 2017 tax law. In fact, in a national poll, around 75% of voters wanted to increase taxes on the wealthiest to support investments in paid leave, child care, and aging and disability care. Recent polling shows that it is even more unpopular with voters when tax cuts for billionaires are combined with drastic cuts to programs.
Conclusion
Families who are watching every penny to make sure they can cover the cost of care, housing, and groceries understand that the Republicans’ tax plan will make it harder for them to make ends meet. The Republican tax plan is out of step with what families need: a tax code that prioritizes families over billionaires.
ABOUT THE AUTHORS
Chad Bolt is the Chief Strategist at Families Over Billionaires.
Amy Matsui is the Senior Director of Income Security at NWLC Action Fund.
