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Childcare in “Build Back Better”

Summary:
Section 23001 of the "Build Back Better" bill would use the Obamacare mold to create a federal childcare program. Low-cost (a.k.a., "low quality") childcare would prohibited unless the provider were to forgo all federal dollars, which would involve something like having zero children from a family at or below 0K annual income.Childcare workers would have to be paid as much as elementary-school teachers.According to the Bureau of Labor Statistics, elementary school teachers earned an average of ,640 annually in 2019.The same BLS data show childcare workers earning an average of ,930.  I.e., under BBB childcare would have to pay them 133% more.A 133% increase is similar to the increase in individual health insurance premiums that occurred when Obamacare came into effect.Families

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Section 23001 of the "Build Back Better" bill would use the Obamacare mold to create a federal childcare program.
  • Low-cost (a.k.a., "low quality") childcare would prohibited unless the provider were to forgo all federal dollars, which would involve something like having zero children from a family at or below $200K annual income.
    • Childcare workers would have to be paid as much as elementary-school teachers.
    • According to the Bureau of Labor Statistics, elementary school teachers earned an average of $55,640 annually in 2019.
    • The same BLS data show childcare workers earning an average of $23,930.  I.e., under BBB childcare would have to pay them 133% more.
    • A 133% increase is similar to the increase in individual health insurance premiums that occurred when Obamacare came into effect.
  • Families would pay on a sliding scale.  i.e., earning more means paying more for the same childcare.
    • Above 150% median family income ($102K annually), the implicit marginal tax rate would be 7% per child until the benefit is exhausted.
      • For a family with two children, that would be 14 percentage points more on its marginal tax rate up to an income of $214K
    • Between 75% and 150% median, the implicit marginal tax rate is about 14 percent per child.
      • For a family with two children, that would be 28 percentage points more on its marginal tax rate
  • Although there are loopholes, child eligibility requires a parent to be employed (part-time is OK), self-employed, engaged in job search, job training, school, or on medical leave.
Section 23002 creates a universal public pre-school program
  • no tuition charged to parents
  • applies to exactly two cohorts of children (age 3 and age 4).

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