New Column: There’s More Than One Way To Address Child Poverty

In a column for Talking Points Memo today, I explore the potential of President Obama’s child care tax credit expansion proposal:

As Demos’ Matt Bruenig is fond of pointing out, the U.S. doesn’t top OECD child poverty charts because our economy is uniquely bad at distributing resources. To the contrary: market incomes in, say, Finland are about as unequal as in the United States. But Finland has serious redistribution programs that reallocate resources from the wealthiest incomes to ease the strain on the poor. That is, its rich bring in huge incomes (like ours) but the country spends heavily on redistributive programs to support low-income children. As a result, Finland’s child poverty rate is a comparatively tiny 3.9 percent. Ours remains reliably north of 20 percent.

Could Obama’s child care tax credit proposal narrow that gap? Maybe a little. It would expand both the number of families who qualify for the federal child care tax credit and the size of the credit itself. But bear in mind that the tax credit still clocks in at a featherweight-class maximum of $3000. And to get that full amount, families must spend at least $6000 on care in a year. That is, to get the additional money, families need to be able to float the cost of child care in the first place so that they can be reimbursed later through the tax code.

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