Child Allowance Trust Fund

Ed Zigler has had a major role in analyzing and shaping child care delivery systems. In his latest of nearly 40 published books, The Tragedy of Child Care in America, Zigler provides a detailed analysis of "why the United States has failed to establish a comprehensive high-quality child care program." In the book, he shares his vision for supporting the child care needs of families with infants and toddlers through a child care allowance trust fund...

"...This trust fund would serve as a means of assisting parents to care for their very young children with whatever combination of parental and supplementary care best suits their circumstances. The fund would provide all families with an annual stipend generous enough to assist in the purchase of good-quality care or to supplement the income of parents who wish to remain at home. Thus, the child allowance would be a demand-side subsidy and a universal cash benefit not restricted by income. The size of the allowance would be based on estimates of the cost of good care.

"...the trust fund would draw revenues from a new payroll tax added to social security deductions. Money in the trust would be entirely separate from other social service accounts, and no exchange of funds between the two systems would be possible. Funds from the trust would be distributed directly to families with children aged three months to three years, although parents who opt not to take the full three-months paid leave when their babies are born could access the funds upon their return to work. With this financial support, as well as improved consumer education regarding the features of good-quality care, more parents would be able to choose environments — whether at home or in a child care setting — that support their children's growth and learning.

"The child allowance would be designed to be self-supporting and would not affect the ailing social security trust at all. Rather, it would merely piggyback on the existing payroll tax mechanism to avoid the need for a new tax collection infrastructure."

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