Should Childcare Expense Be Tax Deductible?

MiaSanMia on 26/06/2018 - 16:24

Long story short, what's your opinion about our current childcare expense level? Should out-of-pocket childcare expenses be deductible against income tax?

Our combined income is roughly $100k per year and we've been paying a childcare fee of more than $220 per week for one child, that's nearly $11,500 per year and this doesn't look like to change when the new Childcare Subsidy kicks in from July. I thinks it's too much out of our net pay and wonder why the Gov don't allow it as deduction against income tax? We send kids to childcare in order to go to work and earn income to pay tax, so shouldn't it be considered as part of the income earning activity under tax deduction definition?

Your thoughts please.

Poll Options

  • 92
    Childcare expenses should be tax deductible
  • 270
    Leave it as is, we need more tax in this country
Financial Childcare Income Tax

Comments

  • Klogg86 on 28/06/2018 - 20:36
    +1

    They shouldn't even subsidise it, let alone make it a tax deduction.

  • kewlaz on 29/06/2018 - 08:33
    +2

    No,
    I don't think the government should have given the baby bonus or any child support. I don't see why I should have to pay for other peoples obligations.

    There should be a 3rd poll option: remove ALL child support.

    • AyjeofSpades on 29/06/2018 - 10:55
      +2

      You could argue child support/subsidies are good for the economy. It's not just about individual benefits for those with children.

      Affordable child-care >> more parents willing to work >> greater participation rate of economy >> higher overall living standards / other benefits of economic growth.

      Many parents consider a job meaningless because after child-care fees they are left with a pittance. It's natural they would rather stay home and raise the child themselves, rather than work for a meagre sum. So they don't work, don't contribute to the economy, and in some cases probably access more government funding to maintain their home life.

      Disclaimer: I have no idea whether the economic benefits outweigh government cost, and I'm not sure what government support is available for stay-at-home parents. Just throwing in my (unsubstantiated) thoughts.

      Out of curiosity, what are some things you are happy to see your tax money go towards?

      • HighAndDry on 29/06/2018 - 13:25
        +2

        I mean, it would arguably be more fair - if we can afford to subsidize and give tax breaks for childcare - to just lower taxes on everyone. People with children can use those savings towards childcare. People without can use those savings towards their own hobbies. If they save? Good for the economy. If they spend? Also good for the economy. THAT seems much fairer.

        • AyjeofSpades on 29/06/2018 - 17:39

          That does sound fair - if we extend it to all government subsidies and tax cuts. If we took away just the childcare subsidies and spread that to everyone as a tax reduction, it would probably be diluted and meaningless.

          Even if we remove all subsidies and spread it evenly across the population, would it have the same economic benefits when spread thin?
          Eg. every person gaining 1 dollar a day doesn't incite any real change, whereas a target group saving $80 a day is substantial.

          Government intervention seems to favour target groups, so maybe it would be fairer your way.

          Again, not an economist, just ramblings.

        • HighAndDry on 29/06/2018 - 17:44

          @AyjeofSpades:

          Eg. everyone person gaining 1 dollar a day doesn't incite spending, whereas a target group saving $80 a day makes a difference (to them).

          I thought we needed childcare subsidies because otherwise these parents couldn't afford childcare. If this is extra money that lets them spend elsewhere, sounds like even more reason not to subsidize it.

  • MementoMori on 29/06/2018 - 09:54
    +2

    There should be a fourth option.

    All tax is theft. Remove income tax and tax breaks.

    Humanity survived for hundreds of thousands of years just fine without it.

    • mccarthyp64 on 29/06/2018 - 13:10

      True ancap :^)

    • HighAndDry on 29/06/2018 - 13:24
      +1

      As much as I love this in principle, the practical reality is that for 99.99% of those hundreds of thousands of years humanity has been around, we were also murdering, raping, pillaging each other, as well as dying from wild animals, cold snaps, famine, etc. Oh, and no wifi.

    • Cluster on 29/06/2018 - 14:42
      +1

      If all tax is theft then you wouldn't mind paying a fee for calling emergency services. Don't have money handy? No police attendance for you. House on fire and you can't pay a few thousand dollars for a call out? Let it burn. Do you drive a car? Better get ready for every single road to be a toll road. Live in a poor area? No road for you.

      • HighAndDry on 29/06/2018 - 17:25
        +1

        I mean, this sounds terrible at first glace, but ambulances cost money. So do police. So do fire engines. So do roads. And they're never free - you're still paying for them with your taxes. If you're not being taxed, you could save that money to pay it when/if you need them. More practically, you would pay that money as a premium into private insurance to provide those services when/if you need them.

        The ONLY people who would actually complain, are those who literally aren't providing enough value to society to financially support themselves - basically people who're a net burden to society.

        Okay, now your turn.

  • neostarsx on 29/06/2018 - 14:10

    Saying don't have kids if you can't afford is a silly comment.
    So poor people are not allowed to have children WTH?
    Any of you making this comment had poor parents? you shouldn't of been born.

    • HighAndDry on 29/06/2018 - 17:26
      +1

      You don't have to be rich to afford to have kids. Rent, food, clothing - these aren't all that expensive if you have a reasonable number of kids. But don't go crying for someone else to pay to raise your kids, or if you can't afford to feed 7 of them.

      No one is saying "If you can't afford them, you should be banned from having kids." People are saying "If you can't afford them, you shouldn't have kids." And that's no different from anything else that's not a necessity - "If you can't afford X, don't have/buy X."

      Replace "X" with literally any other non-necessity: Flat screen TVs, luxury cars, holidays to the Bahamas, a big house, a house (you can rent), chocolate, cigarettes, beer.

  • Cluster on 29/06/2018 - 14:38
    +5

    Market prices adjust to absorb any subsidized support given by government (taxpayers). If suddenly every parent in Australia had several thousand dollars extra to spend on childcare, what do you think would happen? Child care providers would leave money on the table and not raise prices, or increase prices to grab that 'free' money for themselves?

    Anyone remember when the Howard government brought in the 30% private health cover rebate? It's insignificant when private health cover is rising at quadruple the rate of inflation in Australia. That 30% has long been absorbed and forgotten, yet taxpayers are still paying billions of dollars per year directly into the pockets of private industry.

    • Brianqpr on 29/06/2018 - 20:33
      +1

      Absolutely. Same as the first home owners grant, private health care rebate etc. Just gets absorbed into prices and the customer loses again.

  • Geryatric on 29/06/2018 - 18:29
    +1

    Try 30k+ per child. Earning more doesn’t benefit you as you lost all the benefits + increased taxes $100 -$200k is the same . Only people on $300+ starting to take home more

  • twocsies on 29/06/2018 - 19:46

    Why do we expect that this should be a tax deduction? The Child Care Subsidy and associated schemes are direct recognition that the government recognises that child care is a public good, and as such, it is partly paid from the public purse. These benefit schemes are much more nimble than annual taxes. You can change your income or workforce participation at any time during the year. If we had to deal with it once a year (at tax time via deductions), rather than the government paying a large percentage of the child care fees, then changes in work are not accommodated. In my opinion, the way that child care is partly paid for is currently the best way, and what is arguable is the cutoffs and percentages based on income or whatnot.

  • Brianqpr on 29/06/2018 - 20:32

    No, no and no again.

    Childcare is an area being actively targeted by greedy, profit hungry individuals buying land and throwing up childcare centres as fast as they possibly can and making a killing doing it. What do you think they will do to their fees if everyone gets a tax deduction? The same as private health funds, jack them up to a level where the tax deduction becomes redundant and their profits get even fatter.

    Won't solve the expense problem and may make it worse.

  • Dr Prepper on 30/06/2018 - 16:08

    No vasectomies should be tax deductible.

  • bobbified on 02/07/2018 - 14:59

    Combined husband-and-wife income of $351,248 and still whinging about childcare costs and the change in subsidies.

    https://www.theage.com.au/politics/federal/from-today-i-ll-b…

    • HighAndDry on 02/07/2018 - 15:01
      +2

      Oh my (profanity) the sheer entitlement.

      I will now be paying $45 a day above my daily earnings (after tax) to go back to work and treat hospital patients.

      Great, if she doesn't think the $45/day is worth it, she can quit and stay home. It's not like she's not being paid for the work.

      • bobbified on 02/07/2018 - 15:58

        You just can't please everyone.

        She's also turned it into a whole thing into a men vs women thing and goes on about how important her role is and how worthy she is of government support.

        Seriously…

    • boretentsu on 27/07/2018 - 18:23

      I loved that article, it was hilarious!

      By deduction, the husband must be earning mint. So if you want a fulfilling career without having to pay for it, how about having that difficult conversation with your husband about who should sacrifice their career for the other instead of blaming the government.

  • trapper on 03/07/2018 - 14:41

    Unless you have extremely high family income the Child Care Subsidy is far more than any tax deduction you could possibly get.

    ie. In OP's case with a family income of $100k they will get around 74% of child care fees covered by the Child Care Subsidy. As a tax deduction instead they would only get 32.5% back.

  • boretentsu on 27/07/2018 - 18:20

    Tax deductible childcare beats handing out a baby bonus which is a horrible idea.

    Ignoring the OP premise of "this should be tax deductible for me" and the follow up replies of "if you can't afford them don't have them", look at it from a policy perspective: what do you want people to do? Have more babies and get back to work quickly? Then yes, tax deductible childcare will probably encourage that.

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