Paid Family Leave Act Will Raise Taxes. The act’s supporters ignore its many costs.

Reason ^ | March 5, 2020 | Veronique de Rugy

[karpov]

Following increased interest in expanding access to paid family and medical leave, Rep. Rosa DeLauro (D–Conn.) joined forces with Sen. Kirsten Gillibrand (D­–N.Y.) to promote the Family and Medical Insurance Leave, or FAMILY, Act. If we believe the act's supporters, it would cost close to nothing and provide essential benefits to employees who don't currently receive them.

Unfortunately, these claims are bogus.

Under the FAMILY Act, the federal government would offer 12 weeks of paid time off to enable workers to care for infants, recover from major illnesses, and care for severely ill relatives. During that time, employees would receive benefits administered by the Social Security Administration equal to 66 percent of their regular earnings, with a minimum monthly benefit of $580 and a maximum monthly benefit of $4,000. To pay for this new handout, the federal government would impose a 0.4 percent payroll tax to be divided evenly between employers and employees.

Gillibrand argues that the act would provide greatly needed benefits to employees at a minimal cost to them. One of her favorite talking points about the proposal is that it would cost employees only $4 a week, or the equivalent of a cup of coffee.

Unfortunately, the senator's assertion is quite misleading. For starters, a 0.4 percent hike in the payroll tax would not be enough to pay for the federal spending under the plan. The Congressional Budget Office, or the CBO, released a score of the bill as introduced and found that the FAMILY Act would increase spending by $547 billion in benefits and administrative costs over 10 years, but it would only increase net federal revenues by $319 billion during that time. That means that $228 billion in spending wouldn't be paid for by the FAMILY Act's new tax.

[poinq]

This is pretty stupid. You need people working. Working from home is fine. But paying people to stay at home will cause economic depression. Every mother knows her kid can get sick and they should stay at home if they are. People have family leave and sick leave. Let people and kids work it out.

[gibsonguy]

Of course it will. Why should those with no children subsidize those who do?

[Buckeye McFrog]

Well the act’s supporters include Donald J. Trump, so...

[KC_Conspirator]

Recently Reason mag has turned less libertarian and more never Trumper to the point of stupidity.

[Maceman]

This is one issue on which Trump and I disagree.

In a free market society, government should never be allowed to set and enforce rules around employee compensation - just like it should never be allowed to set and control prices for any goods and services.

[dfwgator]

Next thing you know, unemployed folks will say it’s not fair that employed people get paid leave.

[Alberta's Child]

Trump walks a fine line here ... between employers (including Trump himself) who know damn well that paying people for not working is just one more giant incentive to offshore American jobs, and suburban women who are key swing voters but know almost nothing about the financial consequences of the decisions they make.

[meyer]

Why should those with no children subsidize those who do?

Exactly! I have no young children. Where's MY 12 weeks of paid vacation? Or are absent workers worth more to the employer than those that carry the weight.

[Tax-chick]

I’m saddened by you people’s lack of faith in our great government. Haven’t you learned anything from all the great benefits and mandates they’ve greatly provided for us without any additional taxes or borrowing?

[Buckeye McFrog]

This is one issue on which Trump and I disagree.

I disagree as well. But this falls into my pile of bad ideas that are inevitable. They enter a political realm where opposing them becomes hazardous to your electability. Pre-existing conditions in Obamacare for example.

[BBQToadRibs]

[NativeSon]

Or those of us young and healthy, pay more for those who are not?

[gibsonguy]

Yes but to be fair older people do pay higher premiums for insurance.

[NativeSon]

But now, the dopes want us to finance paid leave for illness and taking care of ill family members.

[cherry]

had to add that we’ve had several nurses out for 6 months being paid after having babies...I love respecting motherhood but not only is the hospital losing staff, it has to hire temporary staff to replace them...