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Trump’s Tax Plan Would Only Help Wealthy Parents

Monday, August 15, 2016

NCG member Surina Khan is the CEO of the Women's Foundation of California. Check out her Op-Ed in Wednesday's San Francisco Chronicle for a host of solutions to make childcare affordable in the Bay Area. 

Donald Trump’s proposal to allow parents to deduct the average cost of child care doesn’t help those who need it most: unemployed, low-income and even middle-income families. Tax deductions benefit wealthy families.

Families who have a higher tax rate and who are paying more to have extended care such as nannies or au pairs will likely receive large tax savings from Trump’s plan. Meanwhile, many low-income families make too little to owe income taxes. It is the lower- and middle-income mothers who pay the greatest share of their income for care.

In San Francisco, the annual cost of child care is 62 percent of a single mother’s median income. Pair that with the cost of housing in San Francisco — almost 65 percent of a single mother’s median income — and there is nothing left to pay for food, transportation or clothing. A single mother is going into debt at the end of every month. A once-a-year tax deduction is not going to help her.

In Alameda County, a single mother pays 61 percent of her income for housing and almost 65 percent for child care. In Contra Costa County, she pays 56 percent for child care and 53 percent for housing.

The data come from the California Women’s Well-Being Index, the first online research tool that breaks out women’s well-being data for all 58 counties. Developed by the California Budget & Policy Center in partnership with the Women’s Foundation of California, the index ranks Marin County as No. 1 for women’s well-being in California, closely followed by San Mateo and Sonoma counties. Napa, San Francisco and Contra Costa counties are also in the top tier, while Santa Clara, Alameda and Solano counties fall within the top 25. Working women in the top six Bay Area counties have high median earnings; a full-time, year-round worker earns on average $56,000 per year.

But, there’s clearly need for improvement when it comes to the high costs of child care and housing as well as the wage gap and income quality. Far too many women work for poverty wages. More than half of all women in San Francisco are in managerial and professional occupations, which is what keeps our median salaries so high, but 1 in 6 women works in a low-wage occupation. The number of women living in poverty is about the same.

So, what are real solutions that can support working families and strengthen equity, opportunity and economic well-being of women in the Bay Area and beyond?

We asked 80 California leaders and gender-justice advocates what policy actions they would recommend. Here is what they told us:

•Make child care more affordable and accessible by guaranteeing child care assistance, using current census data to establish income eligibility. To be affordable, child care should be no more than 10 percent of a family’s income.

•Institute universal prekindergarden for 3- and 4-year-olds.

•Encourage community-based child care and workplace collectives.

•Build more affordable housing and increase rent subsidies. Housing is the biggest cost for women and families, and high cost of housing hits low-income households the most.

•Expand and strengthen parental and caregiving leave benefits. Women are principal caregivers for their children and family members, but only 25 to 40 percent of eligible California mothers actually take the leave.

No woman in the prosperous Bay Area should be unable to make ends meet because of high child care costs, high housing costs and wage inequities. We are the home of innovation and disruption, and we need to forge economic policies that benefit all families, not just the wealthy.

Surina Khan is the CEO of the Women’s Foundation of California.