By Sahil Kapur and Bloomberg
February 19, 2019

Democratic presidential candidate Elizabeth Warren is proposing a universal child care plan that would limit American families’ expenses to 7% of income regardless of how many children they have in care -paid for by a tax on the ultra-wealthy.

The Massachusetts senator’s plan, to be unveiled Tuesday, would make child care free for families with incomes below 200% of the poverty level, or less that $51,500 for a family of four, according to a person familiar with the plan. Other families would pay up to 7% of income, depending on how much they earn.

The proposal marks the latest policy entry into a 2020 contest that features scores of progressive Democrats competing over how best to mitigate income inequality and expand the economic safety net for working families. Americans pay nearly as much for child care as they do for rent, with the average cost of child care in the U.S. approaching $1,400 a month, according to a 2018 HotPads analysis of a Care.com state and metro area pricing index.

Warren’s economic populist vision, paired with fierce attacks on corporations and wealthy Americans who she says are rigging the system for self-interest, is at the heart of her campaign, which has already drawn attacks from President Donald Trump.

Warren’s plan would cost taxpayers $70 billion per year, according to an analysis by Moody’s Analytics economists Mark Zandi and Sophia Koropeckyj. It would be paid for with some of the revenue from an annual wealth tax Warren has proposed on assets above $50 million, the person said.

The proposal would “substantially increase the number of children able to receive formal child care” from 6.8 million (or one-third of those under 5 years old) to 12 million (or 60% of children under 5), the economists said. It would cut formal care costs for families with young children by about 17%.

It would be set up as a federal program, built on existing ones like Head Start and administered by local governments and nonprofit entities.

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