Nobel Prize-winning economist James Heckman penned an op-ed this morning in Forbes pushing Congress to use tax reform as an opportunity to maintain and increase the Child and Dependent Care Tax Credit (CDCTC), and make it refundable. The CDCTC is the only tax credit designed specifically to help families with the costs of work-related child care expenses.
“Tax reform is an opportunity to support families that are struggling financially to do right by their children and drive greater prosperity for the nation. Increase the Child and Dependent Care Tax Credit and make it refundable,” Heckman wrote. “Anything short of that will be a missed opportunity to spur economic growth for generations to come.”
Additional excerpts from the article are below. Please feel free reach out to FFYF if you have any questions about the CDCTC or our efforts to ensure it remains a resource for working families. You can also learn more on our website about our efforts to keep child care in the tax code.
Nobel Prize Winning Economist Dr. James J. Heckman: Access To High-Quality Early Childhood Education Benefits Both Children And Parents. “Helping parents afford quality early childhood education as part of a childcare package is not a subsidy – it is an investment. It increases economic productivity by helping parents work, build careers and income, reduce absenteeism on the job and be a part of a capable and stable workforce. At the same time, it builds essential skills in young children that have significant, beneficial short- and long-term effects on education, health, social behavior and lifetime employment and income. (James Heckman, “Nobel Laureate Heckman: Tax Reform Could Boost Economy With Bigger, Refundable Child Care Credit”, Forbes, 10/25/17)
According To Dr. James J. Heckman, Expanding The CDCTC Helps Promote Access To Early Childhood Education, Which Is A Key Driver Of Increased Achievement And Productivity. “Access to affordable, high-quality early care and education is a vital ingredient for social mobility among low- and middle-income families. Research shows that many low- and middle-income children begin life at a disadvantage because their parents don’t have adequate resources to invest in their early development. As a result, the achievement gap opens early and children arrive at kindergarten already far behind their more affluent peers. Promoting greater access to early childhood education promotes greater equality, achievement and productivity.” (James Heckman, “Nobel Laureate Heckman: Tax Reform Could Boost Economy With Bigger, Refundable Child Care Credit”, Forbes, 10/25/17)
Making The CDCTC Refundable Will Allow More Low- And Middle-Income Families, The Families Who Need It Most, To Access The Credit, According To Dr. James J. Heckman. “Making the CDCTC refundable will make sure the benefit goes to those who are most in need. Unfortunately, the majority of low- and middle-income taxpayers with qualified expenses cannot take advantage of the existing CDCTC because its value can’t exceed a family’s tax liability. As a result, higher-income families benefit from the CDCTC when low- and middle-income families need it most… Almost no families in the lowest-income quintile access the credit—because they can’t.” (James Heckman, “Nobel Laureate Heckman: Tax Reform Could Boost Economy With Bigger, Refundable Child Care Credit”, Forbes, 10/25/17)