Sign in Subscribe
Congressional representatives

Rep. Sara Jacobs Introduces Legislation to Raise Estate Tax to Fund Affordable Child Care

Strategic Insights

— 2 min read

California Congresswoman Sara Jacobs has introduced the Leveraging Estate Gains for America's Children and Youth Act, which would cut the newly passed federal estate tax exemption by more than half to $7 million, and dedicate 15% of the generated revenue to address the nation's ongoing child care crisis. The LEGACY Act would provide a third revenue source to supplement the Child Care Development Fund, while adjusting and lowering the current estate tax threshold to inflation. Congresswoman Jacobs' proposal has received support from organizations such as the Chamber of Mothers, MomsRising, and the Alliance for Tax Fairness, who believe that using revenue from estate taxes to alleviate the burden on American families is a smart and creative solution.

Key Takeaways:

  • The LEGACY Act aims to address the nation's child care crisis by generating revenue from the estate tax to fund affordable child care programs.
  • The Act would cut the federal estate tax exemption by more than half to $7 million, and dedicate 15% of the generated revenue to support child care.
  • The proposal would create an Early Childhood Education Trust Fund to provide a third revenue source for child care, in addition to the Child Care Development Fund.
  • The Treasury would allocate 25% of the trust for "stabilization" grants to address the supply-side of the child care crisis.
  • The proposed legislation would reduce the inheritance of Rep. Sara Jacobs and other wealthy individuals, in line with the Act's goal of making the tax code fairer.
  • Rep. Sara Jacobs' proposal has garnered support from various organizations, including the Chamber of Mothers, MomsRising, and the Alliance for Tax Fairness.
  • These organizations believe that using revenue from estate taxes to alleviate the burden on American families is a necessary step in addressing the nation's child care crisis.

Statistics:

  • The lack of affordable childcare is estimated to cost the US economy $122 billion annually (Chamber of Mothers).
  • The proposed legislation would direct 15% of tax revenue from high-value estates toward easing the childcare burden on American families (Congresswoman Sara Jacobs).
  • The newly passed federal estate tax exemption would be cut by more than half to $7 million (LEGACY Act).
  • 25% of the trust would be allocated for "stabilization" grants to address the supply-side of the child care crisis (LEGACY Act).
  • Trump and his billionaire-backed congressional allies have, since 2017, limited the estate tax scope and percentage so the ultra-wealthy can funnel millions and billions to their children without paying their fair share of taxes (Alliance for Tax Fairness Executive Director David Kass).

Sources:

  • Rep. Sara Jacobs (D-CA-53)
  • Chamber of Mothers
  • MomsRising
  • Alliance for Tax Fairness

Read more