To amend the Internal Revenue Code of 1986 to provide a credit for increasing wages paid to child care providers.
Summary
This bill, S. 3534, aims to incentivize increased wages for child care providers by creating a new tax credit. The "Child Care Supply Credit" would be available to employers who pay qualified child care wages. The credit is generally 5%, but increases to 7% for facilities in rural areas.
Expected Effects
The bill's primary effect would be to reduce the tax burden on eligible child care facilities. This could lead to higher wages for child care workers and potentially improve the quality and availability of child care services. The elective payment provision allows the credit to be received as a direct payment, enhancing its immediate impact.
Potential Benefits
- Increased wages for child care workers.
- Potential for improved quality of child care services.
- Support for child care facilities, especially in rural areas.
- Reduced tax burden for eligible employers.
- Direct financial assistance through elective payments.
Potential Disadvantages
- Increased complexity in the tax code.
- Potential for fraud or abuse in claiming the credit.
- The cost of the credit could increase the national debt.
- The credit may not be sufficient to significantly impact wages.
- Benefit may disproportionately favor larger child care facilities.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble). Congress has the power to tax and spend for the general welfare of the United States. The bill's provisions fall under Congress's enumerated powers to collect taxes (Article I, Section 8, Clause 1) and to make all laws which shall be necessary and proper for carrying into execution the foregoing powers (Article I, Section 8, Clause 18).
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).