H.R.1408 - Affordable Child Care Act (119th Congress)
Summary
H.R.1408, the Affordable Child Care Act, proposes amendments to the Internal Revenue Code of 1986 to increase tax benefits related to child and dependent care. The bill aims to double the value of the Child and Dependent Care Credit, increase the Dependent Care Assistance Program limit, and double the Employer-Provided Childcare Credit. These changes are intended to alleviate the financial burden of childcare for families.
Expected Effects
The primary effect of this bill would be to reduce the after-tax cost of childcare for eligible families. This could lead to increased workforce participation, especially among parents, and greater financial stability for families with young children. The increased credits and assistance limits would apply to taxable years beginning after December 31, 2024.
Potential Benefits
- Reduced financial strain on families with children, making childcare more affordable.
- Potential increase in workforce participation as childcare becomes more accessible.
- Increased support for employers providing childcare benefits, potentially leading to more employer-sponsored childcare programs.
- Simplification of the tax code by removing outdated or less relevant provisions.
- Stimulation of the economy through increased spending due to tax savings.
Potential Disadvantages
- Increased government spending and potential budget deficits due to higher tax credits and deductions.
- Potential for increased complexity in tax preparation for some individuals and businesses.
- The benefits may disproportionately favor higher-income families who can afford childcare in the first place.
- Possible inflationary pressure on childcare costs as demand increases.
- The effectiveness of the bill depends on the actual availability and quality of childcare services.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble). Article I, Section 8 grants Congress the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States. The Affordable Child Care Act falls under the purview of Congress's power to tax and spend for the general welfare by providing tax benefits related to childcare.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).