Latest news with #babybonus
Forbes
14-05-2025
- Business
- Forbes
Families With Children Deserve Tax Relief—But A Growing Economy Too
Expectant parents may be disappointed that a $5,000 baby bonus—which President Trump himself said 'sounds like a good idea'—hasn't found a place in the massive tax and budget package now winding its way through Congress. The current draft of the 'One Big, Beautiful Bill' would create tax-advantaged savings accounts that can be opened for newborns, and a pilot program for the next three years, during which the federal government would contribute $1,000 to kick-start each account. Accrued funds would then be accessible for the child when he or she turns 18 to help pay for higher education, to buy a house and other eligible expenses. That may be a help for parents concerned about their kids' futures, but doesn't feel like the same windfall as an immediate $5,000 baby bonus that was floated last month. Yet young parents have more at stake in the tax code than maximizing payouts related to the immediate years when they have young children. If bigger short-term credits or dedication came at the expense of higher marginal income tax rates, higher corporate tax rates and slower economic growth, young parents would find that they are still losers in the deal. Family together at home Higher marginal rates on top earners may sound like a rich and worthy source of tax dollars, but these top earners also tend to be the drivers of economic growth and job creation. Most small businesses are managed as 'pass-through' tax entities, which means higher marginal rates would hit them, hurting workers and job creation broadly. High marginal tax rates discourage work, investment, and entrepreneurship—the very behaviors that drive economic growth and benefit the economy broadly. The corporate tax rate cuts in the 2017 Tax Cuts and Jobs Act (TCJA) resulted in rising real wages, more generous benefits (including for paid time off, a critical benefit for families with young children), and more and better job opportunities for workers. This kind of growing, dynamic economy, more than short-lived tax breaks, will provide families with financial stability over the long term. Lana Pol, who runs a family-owned trucking company in Iowa with 68 employees, explained what the 2017 tax cuts meant for businesses like hers: 'Before the tax cuts, everybody was struggling at that point, as far as small businesses. The confidence wasn't there. When these tax cuts came along, we saw a tremendous increase in people's confidence. Everything seemed to start flowing a lot better, cash flow was better, and just knowing that there was help out there.' A better economy for entrepreneurs and businesses of all sizes might not seem like a boon to families with small children, but will dictate the economic environment that surrounds them. Most families' current budget woes stem from steeply higher living costs, which are the result of inflation, restrictive housing and energy policies, and other growth-crushing regulations left over from the Biden era. Simply by blocking the Biden administration's unfinalized rules, the Trump administration saved the average family of four an estimated $2,100 over the next decade. Rolling back additional red tape will continue to reduce energy and compliance costs, bringing downward pressure on the costs of most goods and services. Families will also benefit from the administration's changes in education policy. Returning funds to states and localities—and even better to parents themselves—will not only shake up under-performing government-run schools and help kids learn more, but also free parents from overpaying for housing in purportedly 'good' school districts, easing housing costs and alleviating a variety of headaches for parents. Reducing taxes on families should remain a priority during negotiations for this tax and budget bill. Hitting already cash-strapped families with a massive reduction in their child tax credit—it was doubled by the TCJA—would cause real hardship. If Congress fails to act and allows the resumption of the pre-2017 tax system, the average taxpayer will see a 22% tax hike. A family of four making $80,610 (the median U.S. income) would see a $1,695 tax increase. The current version of the "One, Big, Beautiful Bill" includes an expanded Child Tax Credit of an additional $1,500 over the next three years, which would provide a big boost to families with the youngest children. Tough choices always have to be made during tax negotiations—especially when we have to fund a government of this enormous size. Families with children have a big stake in this debate, that goes far beyond any single baby bonus or tax credit. They need a tax system that creates a growing economy with more opportunities and affordable living for the long term. Carrie Lukas, a mother of five, is president of Independent Women.
The Guardian
12-05-2025
- Business
- The Guardian
Americans putting life on hold amid economic anxiety under Trump, poll shows
Americans are reconsidering major life events including marriage, having children and buying a home amid economic anxiety in the opening months of the Trump presidency, according to an exclusive poll for the Guardian. Six in 10 Americans said the economy has affected at least one of their major life goals, according to the Harris poll, citing either lack of affordability or anxiety around the current economy. Though Donald Trump's tariff policies have only been in place for a few weeks, and though the president has temporarily walked back on some of his harshest policies, the findings are a sign that Trump's economic agenda could have long-term effects. The Trump administration has said it wants to encourage Americans to have more babies, and is floating a $5,000 'baby bonus' for new mothers. But its economic policies appear to be a major stumbling block to that ambition. Of those who originally planned to have a child in 2025, a majority say the current economy has affected their plans in some way, by either being unable to afford having a child (32%) or being uncomfortable having one in the current economy (33%). Large percentages of those surveyed said they wanted to make major financial decision: 45% said they wanted to make a big purchase – a car, for example, or appliances – and 42% said they wanted to buy a house. But 75% of those who said they wanted to buy a home said the current economy has derailed them. Buying a home has long been seen as the benchmark for the American dream, but has become increasingly unaffordable for many Americans. Home prices rocketed after a buying frenzy during the pandemic, when interest rates were at zero, and have not come down since. Though mortgage rates have fallen slightly since their recent peak of about 7.5%, the average 30-year mortgage rate in March was 6.7% – more than double what it was four years ago. The economic anxiety disproportionately affects the long-term goals of younger Americans, who are less likely to own a home already, be married or have kids. A majority of Gen Z and millennials renters (68%), for example, said they had a goal of buying a house, compared to just 29% of renters who are older. Much of the instability appears to come from the rising cost of living: 65% of Americans said they thought the cost of living has worsened since the start of the year, and half said it had made it more difficult to afford their living expenses. A vast majority (78%) said they had noticed increased grocery prices over the last few months, while 60% said they had also noticed monthly bills and everyday essentials getting more expensive. Although nearly half (48%) of Republicans said the cost of living has gone up this year, Republicans appear to be more optimistic about the overall state of the economy, particularly compared to when Joe Biden was in the White House. When respondents were asked last May whether they thought the US was experiencing a recession, 67% of Republicans said they believed the country was in a recession. Nearly a year later, the number has dropped to 40% of Republicans. On the other hand, 49% of Democrats believed the country was in a recession last May, compared to 59% who think the US in in a recession now. The US is not in recession and has not been since February to April 2020, during the Covid pandemic. Perhaps most concerning for Trump is that although only 33% of Republicans believe the US economy is worsening, 64% of independents believe it is getting worse, more in line with Democrats (73%). More independents believed that the economy was in a recession last May (53%) compared to this April (46%), though the switch in opinion is much smaller than for Republicans. Though Trump has said that his tariffs will 'make America wealthy again', it appears few Americans believe him. Tariffs came out on top in a list of things that Americans believe will most likely hurt their household financially in 2025. Nearly a third (29%) of respondents, including 39% of Democrats, 28% of independents and 21% of Republicans, said that tariffs will do the most harm. Over 20% said that government policies will be the most harmful, including 24% of independents. This survey was conducted online within the US by the Harris Poll from 24 to 26 April, 2025, among a nationally representative sample of 2,102 US adults.
Yahoo
11-05-2025
- Business
- Yahoo
The Trump White House's ‘baby bonus' proposal ignores the true cost of parenthood
The Trump White House is reportedly considering offering new mothers a 'baby bonus' of $5,000 to encourage people to have more children. That might seem like a lot of money. And certainly, for some families, including the families of the 11 million U.S. children who live below the poverty line and get by on less than $33,000 a year for a family of four, it is. That's why a mom I'll call Sierra — one of the mothers I interviewed in the research for my recent book — couldn't believe it when the first of the Covid Economic Impact Payments landed in her mailbox. 'I was just so happy,' she recalled in April 2020, talking about the first check for $1,700 that she received earlier that month for herself and her toddler. 'I paid my car insurance,' she said, 'and I had got my son a lot of clothes because he's growing, and he needs some more shoes. I put some in my savings account.' At the time, Sierra had just moved halfway across the country to live closer to her son's father. She hoped to find a job like the one in food service that she left when she moved. But almost as soon as she arrived, pandemic layoffs began, leaving her with few jobs to apply for or places to turn for support. Without Covid relief money, she told me, 'It probably would have been even harder, because I know I can't really ask a lot of people for money because a lot of people that I know, their jobs laid them off.' Sierra also told me that the money — especially on top of the rent relief she was granted because of Covid — meant she did not have to stress about finding a job right away. And it meant that Sierra, who (like a quarter of all U.S. mothers) had to go back to paid work less than two weeks after giving birth, got to spend more time with her son than ever before. 'I'm enjoying it,' she told me, 'because when I used to work a lot, I used to complain how I didn't have enough time to be with my son.' In the grand scheme of parenting, however, $5,000 barely covers even a fraction of the basics that children need. The Department of Agriculture finds that, on average, it costs American families about $13,000 a year for every child they're raising. In some parts of the country, that cost is over $20,000 a year per child. Which means by the time your child reaches adulthood, they'll likely have cost you about a quarter-million dollars — before factoring in any savings for college. On its own, then, $5,000 is only enough for: The out-of-pocket costs for a hospital birth, if you're lucky enough to have insurance, plus about half of the out-of-pocket costs you'll likely pay if, like roughly 1 in 10 babies in the U.S., yours needs NICU care, or Four months of center-based child care for an infant, or six months if you're lucky enough to find a family home child care provider willing to take infants and with open spots, or About eight months of baby formula, if you're not supplementing with breast milk, or All of the diapers your baby will need in their lifetime, plus all the car seats and boosters they'll need to ride in a vehicle, plus clothes for their first two years. A $5,000 payment is also a pittance compared to what President Joe Biden's Build Back Better plan would have offered families. If billionaire-backed senators like Joe Manchin hadn't killed the bill, it would have included: An expanded child tax credit, like the one that briefly pulled millions of children out of poverty in 2021, before Senate Republicans, with help from a few Democrats, refused to extend it in 2022, Twelve weeks of guaranteed paid family leave for parents of new babies, putting U.S. policies closer to those of most other countries, where paid leave has been guaranteed for years, Universal, affordable, high-quality child care for families, plus support for child care workers, who are currently among the lowest-paid workers in the U.S. economy, a fact that is driving shortages in care, Free preschool for every 3- and 4-year-old, and two years of free community college for every student who wants to attend, plus additional investments to make college more affordable for the low- and middle-income students who often find themselves drowning in debt. These provisions are the kinds of real support that families told me they needed when I asked them what would make it easier for them to raise their kids. As one mom, who makes about $75,000 a year as a college professor, and whose husband makes about $45,000 a year as a middle school teacher, told me in 2022: 'I need the child tax credit to come back. I need a financial cushion. I need time and reliable care for my children. I need consistency. I need institutions to step up and do what they are supposed to do to be humane.' This article was originally published on
Fast Company
11-05-2025
- Business
- Fast Company
Trump's proposed $5000 baby bonus isn't much of a Mother's Day present
President Trump's proposed baby bonus would have come in really handy at chez Guy Birken 15 years ago. Money was a bit of an issue for my family when we welcomed our first child in 2010. We'd moved to Indiana from Ohio in June of that year so my husband could take a higher paying job. I'd left my own job as a high school English teacher. Our baby was born in late August, making it impossible to find a teaching job in our new town. Our timing was impeccable that year. We also unwittingly put our Ohio house on the market one month after the federal first-time homebuyer credit expired, bought a house in Indiana right away, and paid two mortgages for 11 months until the old house sold. As my husband likes to say, in 2010 we went from two incomes to one, from one mortgage to two, and from two people to three. (And yes, I am now considered a financial expert.) But would a $5,000 baby bonus really help new parents on a national scale? Or is it just Trump's transactional solution to falling birth rates? In honor of Mother's Day, let's look at the best ways to support new parents, working mothers, and our nation's children. And it doesn't include a onetime cash payment. Paying for a baby boom The United States sees over 3.6 million births each year. If the government were to go forward with Trump's $5,000 baby bonus proposal, Uncle Sam would be handing out over $18.3 billion to new mothers every year. While that would only be 0.019% of the $9.7 trillion federal budget —basically, a rounding error—it's important to compare that amount to other types of spending that affect American families. Federal Agency 2024 Spending Budget Department of Health and Human Services (HHS) $2.5 trillion Social Security Administration (SSA) $1.6 trillion Department of Education (ED) $228.9 billion Department of Housing and Urban Development (HUD) $88.2 billion Department of Labor (DOL) $66.2 billion Consumer Product Safety Commission (CPSC) $167 million $18.3 billion in annual baby bonuses may represent a tiny portion of the government's total budget, but that spending could be a relatively significant percentage of each of these department's budgets. Specifically, $18.3 would equal Expand to continue reading ↓
Yahoo
10-05-2025
- Business
- Yahoo
Baby bonus, social media tax, sports betting squeeze into tax bills
The Brief Tax bills could lead to baby bonuses, social media taxation, free tax filing, and sports betting in Minnesota. House and Senate versions vary widely and leaders from each side tell FOX 9 they won't pass the other body's provisions. The governor's tax ideas -- a reduced sales tax rate, but new sales tax on services like accounting or legal help -- don't appear in either bill, so they're unlikely to become law. ST. PAUL, Minn. (FOX 9) - A baby bonus, a first-in-the-nation tax on the biggest social media platforms, universal free tax filing, and even sports betting are all on the table as this year's Minnesota tax bill takes its final form. Popular provisions in both Both the House and Senate finished their tax bills this week, and they'll have floor votes next week. But they're very different bills and the kitchen table issues probably won't get resolved until the last minute. "I can't make promises," said Rep. Greg Davids (R-Preston), the House GOP taxes chair. "We'll see what the joint targets are." Even Rep. Davids doesn't know exactly what to expect in the final bill that'll bear his name. A bigger House For now, it includes a $100 baby bonus — a little extra money in the tax return for new parents. The state's Catholic leadership has supported the idea while advocating for a bigger child tax credit than the DFL passed in 2023. "We think it should expand eligibility or increase the size of the credit," said Jason Adkins, executive director of the Minnesota Catholic Conference. "The baby bonus is one way of doing it in a time when budget numbers are really tight." The House bill also has the state footing the bill for anyone who wants to file their tax returns online. Taxing big platforms But it doesn't include a big ticket item from the Senate bill — the proposed social media tax. "Social media tax is not anything that we're looking for at this time," said Speaker of the House Lisa Demuth (R-Cold Spring). "But that's the beauty of what you see in the Senate and then in the House again, where those bills will be matched up. You'll hear arguments for and against both things." The Senate bill adds a small tax per user for platforms with more than 100,000 consumers in Minnesota. The state expects revenue of more than $90 million a year. But tech lobbyists and Republicans say it could increase the cost of advertising for small businesses. Sneaky gambling gambit? The Senate bill could also be where sports betting rises from the dead. It includes a study on the impacts, but opponents suspect that's a placeholder for the bill that failed to get through committees this year. "I'm just a little dubious about bringing sports betting into this large omnibus bill because it's a big, big subject," said Sen. Scott Dibble (DFL-Minneapolis), as he tried and failed to amend the study out of the tax bill. What's next The House and Senate leaders each told FOX 9 the other body's provisions won't pass, but that could change with global negotiations. And for now at least, neither one of the bills includes the governor's suggested sales tax rate reduction with new sales tax on services.
