The Nation Can Easily Afford to Invest $77.2 Billion in Children

Any one of the following could pay for a 60 percent reduction in child poverty:

  • Closing tax loopholes that allow U.S. corporations to dodge $90 billion in federal income taxes each year by shifting profits to subsidiaries in tax havens;5 or
  • Eliminating tax breaks for the wealthy by taxing capital gains and dividends at the same rates as wages, saving more than $84 billion a year;6 or
  • Closing 23 tax loopholes included in former House Ways and Means Chairman Dave Camp’s Tax Reform Act of 2014, which would free up an average of $79.3 billion per year;7 or
  • Cutting only 14 percent of the nation’s FY2015 $578 billion in military spending.8 The U.S. houses less than 5 percent of the world’s population but accounts for 37 percent of the world’s military expenditures; or
  • Scrapping the F-35 fighter jet program, already several years behind schedule and 68 percent over budget and still not producing fully functioning planes. For the $1.5 trillion projected cost of this program, the nation could reduce child poverty by 60 percent for 19 years.9

Alternatively the nation could:

Increase the value of SNAP benefits for families with children by 30 percent and reduce child poverty by 16 percent (cost = $23.2 billion).  by Eliminating tax breaks for corporate meals and entertainment (savings = $14 billion);10

Ensuring high-income households don’t pay less in taxes than middle income families ($7 billion);11 and

Closing the Gingrich-Edwards S-corporation loophole that allows professionals such as lawyers and doctors who work for themselves to avoid payroll taxes by characterizing much of their income as business profits rather than wages or salaries ($2.5 billion).12

Provide housing subsidies for poor and near-poor families with children, reducing child poverty by 21 percent (cost = $23.5 billion) and provide subsidized jobs to unemployed or underemployed people in families with children, reducing child poverty by 10.7 percent (cost = $22.9 billion).  by Making common sense reforms to corporate accounting tax rules (savings = $58 billion).13
Make the Child Tax Credit fully refundable and reduce child poverty by 12 percent (cost = $12.4 billion)  by Returning estate and gift taxes to 2009 levels, (savings = $13.1 billion).14
Increase the value of the Earned Income Tax Credit and reduce child poverty by 9 percent (cost = $8.2 billion). by Closing tax loopholes that allow speculators who trade risky investments called derivatives to avoid, defer, or reduce taxes (savings = $2.9 billion);15

Preventing tax-preferred retirement accounts, which were designed to help middle-class families save for retirement, from being used by the wealthy to shelter income from taxes (savings = $2.8 billion);16 and

Closing the corporate stock options tax loophole that allow companies to deduct stock options cashed in by an employee at the inflated current market value, rather than the original cost to the corporation (savings = $2.5 billion).17

Provide access to child care subsidies for poor and near-poor families and reduce child poverty by 3 percent (cost = $5.3 billion).  by Closing the tax loophole that allows corporations to write-off unlimited amounts of compensation for corporate executives as long as it's "performance based" (savings = $5 billion)18 and

Eliminating tax giveaways for corporate jets (savings = $0.37 billion)19
Increase the value of the Child and Dependent Care Tax Credit and reduce child poverty by 1 percent (cost = $1.6 billion). by Closing the 'carried interest' tax break for hedge fund managers by requiring that their earnings be taxed as ordinary income rather than capital gains (savings = $1.7 billion). 20
Pass through and disregard child support and reduce child poverty by 1 percent (cost = $1.1 billion). by Eliminating the mortgage interest deduction for vacation homes and yachts (savings - $1.5 billion). 21