The U.S. median income for a family of four is about $90,000. Those families would pay 2% of income annually ($1,800) for child care. Taxpayers would pay the rest, roughly $21,000 for two kids in day care, according to estimates by Rachel Greszler of the Heritage Foundation. In wealthy states like Massachusetts, where child-care prices are higher, a family of four earning $200,000 a year could receive $23,000. Even at $367,000 in income, that Bay State family could get $10,000 in subsidies (as long as they self-certify they have less than $1 million in assets).
• Democrats also want paid family leave—about two-thirds of average wages for up to 12 weeks a year for any family care. It would apply to both full- and part-time employees, and in the case of newborns both parents would be entitled to leave. This means a married couple with a newborn—each earning $200,000 (Mr. Biden’s definition of a “rich” household)—could each collect more than $1,000 in weekly benefits, resulting in $24,000 of paid leave in one year. A couple making $100,000 each would be eligible for roughly the same amount.
Here’s what you need to know about new entitlements
• Democrats are also expanding ObamaCare. This spring’s Covid bill eliminated the income cap (400% of the poverty level) on who qualifies for subsidies. Brian Blase of the Galen Institute has calculated this windfallfor higher-income earners. It’s especially large for older Americans or those living in parts of the country where the benchmark premium (used to calculate benefits) is higher than the national average.
A family of five with a 60-year-old head of household in Prescott, Ariz., for instance, could earn $350,000 a year and still qualify for an ObamaCare subsidy of $21,309. Even at $500,000 of income, that family would still get $8,559 in federal healthcare dollars.
• The bill includes a huge, new $12,500 electric vehicle tax credit. Since EVs cost between $10,000 and $15,000 more than similar gas-powered vehicles, this money will mostly flow to well-off coastal dwellers, especially in California. A couple can make $800,000 a year and still qualify for some of the credit.
• The biggest subsidy of all may be the return of the state and local tax deduction. Speaker Nancy Pelosi has promised her Members “meaningful” relief above the current $10,000 cap. Only some 15% of taxpayers itemize their deductions, and most of those who would benefit from a higher cap are the affluent—again mostly in richer coastal states.