Warren to propose universal childcare plan funded by US wealth tax

WASHINGTON • Democratic presidential candidate Elizabeth Warren (picture) is proposing a universal childcare plan that would limit American families’ expenses to 7% of income regardless of how many children they have in care — paid for by a tax on the ultra-wealthy.

The Massachusetts senator’s plan, set to be unveiled yesterday, would make childcare free for families with incomes below 200% of the poverty level, or less than US$51,500 (RM210,120) for a family of four, according to a person familiar with the plan.

Other families would pay up to 7% of income, depending on how much they earn.

The proposal marks the latest policy entry into a 2020 contest that features scores of progressive Democrats competing over how best to mitigate income inequality and expand the economic safety net for working families.

Americans pay nearly as much for childcare as they do for rent, with the average cost of childcare in the US approaching US$1,400 a month, according to a 2018 HotPads analysis of a Care.com state and metro area pricing index.

Warren’s economic populist vision, paired with fierce attacks on corporations and wealthy Americans who she said are rigging the system for self-interest, is at the heart of her campaign, which has already drawn attacks from US President Donald Trump.

Warren’s plan would cost taxpayers US$70 billion per year, according to an analysis by Moody’s Analytics economists Mark Zandi and Sophia Koropeckyj.

It would be paid for with some of the revenue from an annual wealth tax Warren has proposed on assets above US$50 million, the person said.

The proposal would “substantially increase the number of children able to receive formal childcare” from 6.8 million (or one-third of those under five years old) to 12 million (or 60% of children under 5), the economists said. It would cut formal care costs for families with young children by about 17%.

It would be set up as a federal programme, built on existing ones like Head Start and administered by local governments and non-profit entities. — Bloomberg