Thursday, April 21, 2016

Women's think tank proposes paying for family leave with 401k-like "personal care accounts"

The Independent Women’s Forum, a “conservative” think tank, propose paying for “paid parental leave” by allowing workers to set up 401l-like accounts, tax deferred, as Personal Care Accounts (PCA’s), from which money could be withdrawn tax free by new parents.  Some versions of these plans could cover caring for elderly parents or filial responsibility situation. It might be possible even to set up separate plans for eldercare compared to parenthood.  Plans could cover adoption of a “Wednesday’s child”

IWF has an article explaining the plan by Carrie Lucas, from Forbes . She refers to an actual report PDF here.

Danielle Paquette covers the proposal on p A14 of the Washington Post on Thursday.

It’s obvious that many working mothers aren’t making a lot of money, and are at early points in their work lives (same for fathers, OK – not everyone has Mark Zuckerberg’s resources – with a pediatrician as a wife). Without imposing, say, a $15 minimum wage everywhere in lower cost areas, local governments or states could experiment with slight increases in the wage to cover the cost of the 401k “premiums”.

Another question would be whether single or childless (or sometimes LGBT) people would take the deduction if was not mandatory (because they’re paying for someone else’s benefit that they can neve use).  It would be more likely they would get it if eldercare were included in one bundled product, but that would make the premiums higher for everyone.
The plans could be privately administered, by life and health insurance companies.

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