The campaign’s release about the plan describes a new tax deduction that “will be capped at the average cost of care for the state of residence.” It then says that “Mr. Trump’s plan will ensure stay-at-home parents will receive the same tax deduction as working parents, offering compensation for the job they’re already doing, and allowing them to choose the child care scenario that’s in their best interest.” Both points are reiterated in Ivanka Trump’s Wall Street Journal op-ed about the plan.
Ellis reads this language to mean that every family, whether or not in day care, gets a tax deduction worth the average cost of child care in its state. (Well, every married couple that makes less than $500,000 a year, that is; and only the first four children in a family would get the deduction.) If that’s right, Trump’s plan does not favor two-earner couples who use day care over one-earner couples that keep the children at home, as some child-care proposals–including those of Hillary Clinton–do. In effect, he concludes, Trump has increased the dependent exemption from $4,000 per child to roughly $16,000 per child.
A potential problem for the Trump campaign is that it has been saying for months that it planned to modify Trump’s large tax-cut plan so that the federal government would not take as massive a revenue hit. This proposal goes pretty far in the opposite direction.
Update: I should add that if Trump’s proposal is what Ellis takes it to be, then it would be a significant improvement in the tax structure, which currently places too high a share of the tax burden on parents and especially on parents of large families.