Congress has passed the Trump Administration-backed reconciliation bill, which contains the largest cuts to the U.S.’s social safety net—including Medicaid and SNAP—in history. The legislation also includes an extension of the paid leave tax credit, which the Trump Administration has claimed “strengthens paid family leave.” But in reality, the paid leave tax credit has already been shown to be ineffective in expanding access to paid leave.
Under the paid leave tax credit, which first passed in 2017, employers have the option to receive a small reimbursement for voluntarily providing as little as two weeks of paid leave at only a fraction of workers’ wages. But even with these highly flexible parameters, Dept. of Treasury data shows that only a little over 1,000 businesses even utilize this credit currently, mostly huge corporations.
The following is a statement from A Better Balance President Inimai Chettiar:
“The paid leave tax credit as it currently exists has only served to provide a subsidy for a small handful of billion-dollar corporations that already have the means to provide paid leave voluntarily. The data that exists on the tax credit shows that it will not provide any meaningful expansion in access to paid family and medical leave for America’s workers, nor does it make it truly affordable for most businesses — and especially small businesses — to provide this critical benefit to their workers.
Enfolded in a bill that contains the largest cuts to our social safety net in history — slashing health insurance and food stamp benefits for millions of families in favor of tax cuts for the wealthy — this paid leave “victory” represents nothing but smoke and mirrors. We reject the White House and Republicans in Congress’ efforts to claim this legislation as a victory for paid leave, or for working families at all—it is squarely the opposite. We will continue to fight for the national paid family and medical leave program that workers across the country deserve.”
