FREE ELECTRONIC LIBRARY - Abstracts, online materials

Pages:   || 2 | 3 | 4 | 5 |   ...   | 14 |

«OVERTAXING THE WORKING FAMILY: UNCLE SAM AND THE CHILDCARE SQUEEZE Shannon Weeks McCormack* Today, many working parents are caught in a “childcare ...»

-- [ Page 1 ] --



Shannon Weeks McCormack*

Today, many working parents are caught in a “childcare squeeze”: while they

require two incomes just to make ends meet, they end up spending a strikingly

large percentage of their income on childcare so that they can work outside the

home. Worse still, some parents find themselves “squeezed out” of the market entirely, unable to earn the additional income their families require because they cannot find jobs that pay enough to offset soaring childcare expenses.

This Article argues that the tax laws have played an important role in aggravating these hardships. Currently, the Internal Revenue Code treats the childcare costs incurred by working parents as personal expenses, subject to various dollar limitations, percentage limits, and phaseouts. Once these limitations are applied, working parents will receive tax relief for only a small fraction of the childcare costs they actually incur. This Article shows that this is inappropriate as a matter of fundamental tax policy and results in the overtaxation of the working family. It then provides a blueprint for meaningful reform that would properly treat working childcare costs like other costs of earning income and keep the tax laws from worsening the working family’s economic plight.

Table of Contents Introduction..................................................... 560 I. Current Law: The Limited Tax Relief Provided to Working Families......................................... 564 A. Tax Relief for Nonworking Childcare Expenses............. 565 B. Tax Relief for Working Childcare Expenses................. 568 C. The Reality Faced by Working Families: What Is the Effect (or Lack Thereof) of the Working Childcare Provisions?..... 572 II. Fundamental Tax Policies: For What Expenses Should Tax Relief Be Granted?................................... 577 A. Unnecessary Adjustments: Tax Reductions for Consumptive Expenses................................................ 578 B. Necessary Adjustments: Tax Reductions for Nonconsumptive Expenditures............................................ 579 C. Hybrid Expenses......................................... 581 III. Analyzing the Working Childcare Expense.............. 582 * Associate Professor of Law (with tenure), Jack MacDonald Distinguished Scholar 2015–16, University of Washington School of Law. Thank you to Professors Thomas Cobb, Sanne Knudsen, Lisa Manheim, and Kathryn Watts, and the participants of the tax section at the Annual Meeting of the Law and Society Association, Seattle, Washington 2015 for thoughtful comments. Thanks also to Mary Whisner in the Gallagher Law Library and to Talia Butler for their research assistance.

560 Michigan Law Review [Vol. 114:559

–  –  –

The economic plight of the working family is worsening. This cry has been made in the recent campaign speeches of many political candidates,1 by lawmakers on both sides of the aisle,2 and by the President of the United

1. See, e.g., Laurel Elder & Steven Greene, Politicians Love to Talk About Families. But Maybe Not Yours., Wash. Post (Sept. 7, 2012), http://www.washingtonpost.com/opinions/ politicians-love-to-talk-about-family-but-maybe-not-yours/2012/09/07/0be2edea-f218-11e1-a dc6-87dfa8eff430_story.html [http://perma.cc/79KS-6KVN] (“Odes to families—their values, their struggles to make ends meet, their efforts to protect their children—have been broadcast in nearly every political campaign in recent times. Mitt Romney, in his speech accepting the Republican nomination last month, made the promise ‘to help you and your family’ his central message. Obama, in his convention speech, argued that this election will have a huge impact ‘on our children’s lives for decades.’ And at both conventions combined, ‘families’ was the fourth-most-mentioned word or phrase, right behind ‘jobs,’ ‘Romney’ and ‘Obama.’ ”).

2. See, e.g., Lauren French & John Bresnahan, House Democrats Outline Agenda, Politico (July 16, 2014, 11:28 AM), http://www.politico.com/story/2014/07/house-democrats-100day-action-plan-nancy-pelosi-108985.html [http://perma.cc/Y7Z3-APP7] (discussing the “100-day action plan” meant to help the middle class and working families that House Democrats recently released); see also Working Families Flexibility Act of 2013, H.R. 1406, 113th Cong. (2013) (describing the Working Families Flexibility Act, introduced by Republican Congresswoman Martha Roby, which has passed the U.S. House of Representatives and, as its name suggests, is meant to provide help to the working family).

Uncle Sam and the Childcare Squeeze 561 February 2016] States in more than one State of the Union Address.3 The White House recently hosted a daylong summit devoted to the struggles today’s working families face,4 which are also chronicled in books,5 op-ed pieces,6 and proposals for legislative reform.7 And current data that confirm there are good reasons to be concerned about the working family’s continuing ability to “make ends meet,”8 let alone thrive.9 Childcare expenses represent one of the highest household costs incurred by young families in the United States.10 Moreover, although middleSee President Barack Obama, State of the Union Address (Jan. 20, 2015), http://www.whitehouse.gov/the-press-office/2015/01/20/remarks-president-state-union-address-januaryhttp://perma.cc/QW43-F7U4] (“So what does middle-class economics require in our time? First, middle-class economics means helping working families feel more secure in a world of constant change. That means helping folks afford childcare, college, health care, a home, retirement.”); see also President Barack Obama, State of the Union Address (Jan. 28, 2014), http://www.whitehouse.gov/the-press-office/2014/01/28/president-barack-obamasstate-union-address [http://perma.cc/5VQJ-PVMB] (“Over more than three decades, even before the Great Recession hit, massive shifts in technology and global competition had eliminated a lot of good, middle-class jobs, and weakened the economic foundations that families depend on.”).

4. On June 23, 2014, the White House, the Department of Labor (DOL) and the Center for American Progress (CAP), hosted a summit with a special focus on women and their families. White House Summit on Working Families, http://workingfamiliessummit.org [http://perma.cc/T3A8-HTSA].

5. See, e.g., Elizabeth Warren & Amelia Warren Tyagi, The Two-Income Trap:

Why Middle-Class Mothers and Fathers Are Going Broke (2003) (explaining the economic hardships faced by dual-earner couples).

6. See, e.g., Jillian Berman, When Being a Stay-at-Home Mom Isn’t a Choice, Huffington Post (June 30, 2014, 7:32 AM), http://www.huffingtonpost.com/2014/06/30/stay-athome-moms_n_5537503.html [http://perma.cc/73Z4-9G7X]; Belinda Luscombe, Most Stay at Home Dads Not There by Choice, Time (June 5, 2014), http://time.com/2827314/most-stay-athome-dads-not-there-by-choice/ [http://perma.cc/9QEX-XPFD]; Judith Warner, The Opt-Out Generation Wants Back In, N.Y. Times (Aug. 7, 2013), http://www.nytimes.com/2013/08/11/ magazine/the-opt-out-generation-wants-back-in.html [http://perma.cc/YCC8-K7CB].

7. Notably, on February 2, 2015, President Barack Obama released his budget for fiscal year 2016, asking Congress to help him “bring middle-class economics into the 21st Century,” and explaining that “middle-class economics means helping working families afford the cornerstones of economic security: child care, college, health care, a home, and retirement.” President Barack Obama, The Budget Message of the President (Feb. 2, 2015), http://www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/message.pdf [http://perma.cc/ B9ZJ-C8P4]. Additionally, Democratic Senator Kirsten Gillibrand has discussed tax reform as part of her overall agenda to make childcare more affordable to parents. See Making Childcare Affordable and Available, Kirsten Gillibrand, http://www.gillibrand.senate.gov/agenda/making-childcare-affordable-and-available [http://perma.cc/9T7M-4V9S].

8. White House Summit on Working Families, supra note 4 (“Too many working Americans—both women and men—are living paycheck to paycheck, struggling to make ends meet and respond to the competing demands of work and family.”).

9. See, e.g., Sarah Jane Glynn, The New Breadwinners: 2010 Update, Ctr. for Am. Progress (Apr. 16, 2012), http://www.americanprogress.org/issues/labor/report/2012/04/16/113 77/the-new-breadwinners-2010-update/ [http://perma.cc/45MP-D847] (discussing post-recession income statistics of the working family).

10. ChildCare Aware of Am., Parents and the High Cost of Childcare 20–23 (2014), http://www.usa.childcareaware.org/advocacy/reports-research/costofcare/ [http://per 562 Michigan Law Review [Vol. 114:559 class income levels have been declining for well over a decade,11 the costs of childcare have consistently climbed.12 Today, most two-parent families consist of two earners and require at least two incomes to meet their needs.13 The pressure to find work is even greater for single parents, who may bear the primary responsibilities of generating income and caring for their children alone. But parents lucky enough to find themselves employed will also find themselves in the “childcare squeeze,”14 spending a strikingly large percentage of their income on childcare to work outside the home.15 Worse still, ma.cc/8F67-D47N]; see also Tara Siegel Bernard, Choosing Child Care When You Go Back to Work, N.Y. Times (Nov. 22, 2013), http://www.nytimes.com/2013/11/23/your-money/choosing-child-care-when-you-go-back-to-work.html [http://perma.cc/6J67-G5WK].

11. Keith Miller & David Madland, What the New Census Data Show About the Continuing Struggles of the Middle Class, Ctr. for Am. Progress (Sept. 16, 2014), https://www.americanprogress.org/issues/economy/news/2014/09/16/97203/what-the-new-census-data-showabout-the-continuing-struggles-of-the-middle-class/ [http://perma.cc/36ED-B7DN]; Rome Neal, Broke on Two Incomes, CBS News (Sept. 9, 2003, 9:15 PM), http://www.cbsnews.com/ news/broke-on-two-incomes/ [http://perma.cc/2FRQ-V4J6]; Alicia Parlapiano et al., The Shrinking American Middle Class, N.Y. Times (Jan. 26, 2015), http://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html [http://perma.cc/ACK6-K4PX]; Dionne Searcey & Robert Gebeloff, Middle Class Shrinks Further as More Fall Out Instead of Climbing Up, N.Y. Times (Jan. 25, 2015), http://www.nytimes.com/2015/01/26/business/economy/middle-class-shrinks-further-as-more-fall-out-instead-of-climbing-up.html [http://perma.cc/ A9Tp-DEPH].

12. See Bradford Plumer, The Two-Income Trap, Mother Jones (Nov. 8, 2004, 4:00 AM), http://www.motherjones.com/politics/2004/11/two-income-trap [http://perma.cc/796DVMDE] (discussing Warren & Tyagi, supra note 5) (“Two-income families are almost always worse off than their single-income counterparts were a generation ago, even though they pull in 75 percent more in income. The problem is that so many fixed costs are rising—health care, child care, finding a good home—that two-income families today actually have less discretionary money left over than those single-earner families did.”).

13. See D’Vera Cohn et al., Pew Research Ctr., After Decades of Decline, a Rise in Stay-at-Home Mothers 5 (2014), http://www.pewsocialtrends.org/files/2014/04/MomsAt-Home_04-08-2014.pdf [http://perma.cc/4YD5-UZGC] (“The share of mothers who do not work outside the home rose to 29% in 2012, up from a modern-era low of 23% in 1999, according to a new Pew Research Center analysis of government data.”); see also Glynn, supra note 9 (“[M]ost children today are growing up in families without a full-time, stay-at-home caregiver. In 2010, among families with children, nearly half (44.8 percent) were headed by two working parents and another one in four (26.1 percent) were headed by a single parent. As a result, fewer than one in three (28.7 percent) children now have a stay-at-home parent, compared to more than half (52.6 percent) in 1975, only a generation ago.”).

14. See Carol Morello & Scott Clement, “Happy Days” No More: Middle-Class Families Squeezed as Expenses Soar, Wages Stall, Wash. Post (Apr. 26, 2014), http://www.washingtonpost.com/local/happy-days-no-more-middle-class-families-squeezed-as-expenses-soarwages-stall/2014/04/26/f4a857f0-7a47-11e3-b1c5-739e63e9c9a7_story.html [http://perma.cc/ 4WRL-Z2WK]; David Riley, Many Families Caught in Child Care Squeeze, Democrat & Chron. (Aug. 11, 2014, 11:35 AM), http://www.democratandchronicle.com/story/news/2014/ 08/09/childcare-monroe-county-elaine-spaull/13780719/ [http://perma.cc/HYD9-ZF9J]; Melissa Schorr, The Day Care Squeeze: How Families Cope in the Highest-Priced Child-Care Market in the Nation, Boston.com (Dec. 12, 2010), http://www.boston.com/lifestyle/articles/2010/12/ 12/the_day_care_squeeze/ [http://perma.cc/9GZM-BGU2].

15. See Childcare Aware of Am., supra note 10, at 20–23 (showing childcare as one of the highest costs in a family’s budget).

Pages:   || 2 | 3 | 4 | 5 |   ...   | 14 |

Similar works:

«RESOLUCIÓN No. 2187 DE 2015 (18 de septiembre de 2015) Por medio de la cual se adoptan decisiones dentro del procedimiento administrativo para determinar la posible inscripción irregular de algunas cédulas de ciudadanía en el municipio de MARIQUITA departamento del TOLIMA, para las elecciones de autoridades locales a realizarse el 25 de octubre de 2015. EL CONSEJO NACIONAL ELECTORAL, En ejercicio de sus facultades constitucionales y legales, en especial las contenidas en los artículos 265...»

«THE SIX PERFECTIONS A true practitioner of Tibetan Buddhism wants to Become enlightened like the Shakyamuni Buddha for the sake of all living beings. Tibetan Buddhism is a part of the Mahayana tradition and according to this tradition there are six practices to be cultivated in order to be able to reach enlightenment. These practices are known as the six (transcendent) perfections, or the six paramitas. Some Buddhist teachings mention ten perfections in stead of six. The six perfections are: 1....»

«MEMORANDUM TO: Patricia Roberts, PELE Clinic Director FROM: Jeff Martin, Law Student, PELE Special Education Advocacy Clinic RE: Attendance of a School Attorney at IEP Meetings DATE: October 23, 2009 QUESTION PRESENTED Whether an attorney for the school can legally attend an IEP Team Meeting? STATEMENT OF FACTS PELE Clinic students have observed attorneys representing the school district at some IEP meetings. Sometimes the attorney was helpful; other times, the attorney was adversarial....»

«Ethics vs. Ethos in US and UK Megabanking ∗1 Edward J. Kane Working Paper No. 43 May 11, 2016 ABSTRACT Company law in the US and UK fails to acknowledge that authorities’ propensity to rescue giant banks from the consequences of insolvency assigns taxpayers a coerced and badly structured equity stake in too-big-to-fail institutions. The entrenched managerial norm of maximizing stockholder value lends a misplaced legitimacy to efforts by TBTF managers to take on dangerous levels of tail risk...»

«Appeared in Reduction, Explanation, and Realism, ed. David Charles and Kathleen Lennon (Oxford: Clarendon Press, 1992), pp. 421-465. This is a corrected Final Draft: please check with the published version before quoting. For page numbers of published version add approx. 420 to numbers of the present version. The Autonomy of Colour Justin Broackes This essay* takes two notions of autonomy and two notions of explanation and argues that colours occur in explanations that fall under all of them....»

«THE LAW REFORM COMMISSION OF WESTERN AUSTRALIA Project No 1 – Part I Protection to Defaulting Purchasers WORKING PAPER OCTOBER 1968 INTRODUCTION As part of its first programme the Law Reform Committee has been asked to consider the need for legislation to protect the rights of purchasers who default under terms contracts for the sale of land and to look at the possibility of modernising and consolidating certain statutes relating to the sale of land. The Committee having completed its first...»

«OPTIMAL SPECIFICITY IN THE LAW OF SEPARATION OF POWERS: THE NUMEROUS CLAUSES PRINCIPLE1 Gary Lawson∗ In Separation of Powers as Ordinary Interpretation,2 Professor John Manning levels a broad, and largely justified, criticism against both formalist and functionalist approaches to separation of powers cases, at least as those approaches are frequently employed by jurists.3 Manning points out that each methodology’s adherents often commit a “generality-shifting” error that can either...»

«REPORT ON TICKET RESELLING AND ARTICLE 25 OF THE ARTS & CULTURAL AFFAIRS LAW NEW YORK STATE DEPARTMENT OF STATE 1 COMMERCE PLAZA ALBANY, NEW YORK 12231 518-486-9846 HON. LORRAINE CORTÉS-VÁZQUEZ SECRETARY OF STATE February 1, 2010 INTRODUCTION Pursuant to Chapter 68 of the Laws of 2009, the Department of State (“Department”) submits to the Governor, Temporary President of the Senate, Speaker of the Assembly, and minority leaders of each house of the Legislature the following report...»

«No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities offered by this short form prospectus have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the...»

«Case 3:09-cv-02739-L-NLS Document 8 Filed 03/15/10 Page 1 of 31 1 Michael J. Aguirre, Esq., SBN 060402 Christopher S. Morris, Esq., SBN 163188 2 Maria C. Severson, Esq., SBN 173967 AGUIRRE, MORRIS & SEVERSON LLP 3 444 West C Street, Suite 210 San Diego, CA 92101 Telephone: (619) 876-5364 4 Facsimile(619) 876-5368 5 Attorneys for Plaintiffs 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 TAMER SALAMEH, an individual; REAL Case No. 09-CV-02739-L-NLS ESTATE 4...»

«TUTORIAL EXERCISE NO 1 Question 1 Explain why the Commonwealth Parliament has the power to make laws relating to companies. Discuss the role that ASIC plays in relation to companies. ASIC – Australian Securities and Investment Commission Commonwealth Parliament has the power to make laws relating to companies because the States has given the power to the Federal Parliament under s 51 (xxxvii).Set up by ASIC Act, work under the Corporation Act,  Enforce the law  Ensure compliance ...»

«Guidance for opponents in civil legal aid cases Someone involved in a civil court case may apply for legal aid. If you are also involved in the case, this could affect you. If your opponent has applied for legal aid, you can tell us of any concerns you have or give us relevant information. This is called “making representations”. Updated September 2016 Guidance for opponents in civil legal aid cases Contact us Do you want to: • find your nearest legal aid solicitor • find out more about...»

<<  HOME   |    CONTACTS
2017 www.abstract.dislib.info - Abstracts, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.