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W&M Analysis: Costs for Child Care & Nursery Schools Increased Under Dems’ Expanded Child Tax Credit

December 16, 2021 — Blog    — Press Releases    — Work and Welfare   

When asked whether Democrats’ tax-and-spend bill “would lower inflation” particularly in child care, White House Press Secretary Psaki said, “That’s what dozens of economists have said.”

However, costs for child care and nursery schools have actually increased since payments of Democrats’ extended Child Tax Credit (CTC) started in July.

Child care and Nursery School inflation increased faster under the CTC than the historical average.

The annualized price increase in child care due to the Child Tax Credit was 4.9 percent–far higher than 3.8 percent, the historical average 12-month rate since the Bureau of Labor Statistics (BLS) began recording these costs in the early 1990s.

Key Details: 

  • Costs for child care and nursery schools have actually increased since payments of the CTC started in July, at a rate faster than the historical average 12-month rate from 1992 to this year.
  • Democrats will worsen these price increases for child care with their Washington takeover of child care that imposes a costly “Toddler Tax.” Studies show this takeover will cost families anywhere from $13,000 to $27,000 more.
  • Democrats’ supposed “cost-lowering subsidies” will only go to those making a certain amount of money–but a family earning just one dollar above median income in their state will be forced to pay the full amount, driven up by Washington regulations.