Sponsor
Sara Jacobs
Representative · D-CA
Representative · D-CA
The bill channels estate-tax revenue to expand child-care supply and subsidies—helping parents and low-income families—while lowering the estate-tax exclusion and tying funding to volatile receipts, which raises taxes and planning burdens for estates and risks unstable program funding and fiscal trade-offs.
Parents and low-income families (and their children) gain expanded child care supply and increased access to subsidized slots because the bill directs grants and at least 25% of funds to child-care supply and CCDBG-related subsidies.
State and local governments receive a dedicated supplemental funding stream tied to estate-tax receipts (15% of IRC §2001), giving them a clearer funding source to plan child-care programs.
Taxpayers with very large estates face reduced incentives to shelter wealth because the estate tax exclusion is lowered to $7,000,000, which may modestly increase estate-tax receipts available for public services like child care.
Families of decedents, heirs, small-business owners, and homeowners may face substantially higher estate-tax bills (exclusion cut from $15M to $7M), potentially forcing asset sales or creating liquidity strains for survivors.
Because the supplemental child-care funding is tied to estate-tax receipts, states and families could experience year-to-year fluctuations in child-care funding when estate receipts vary, undermining program stability.
Dedicating estate-tax-derived funds as supplemental spending (without offset) may increase federal spending and deficits or crowd out other priorities, affecting taxpayers broadly.
Based on analysis of 2 sections of legislative text.
Establishes an Early Childhood Education Trust Fund funded by 15% of estate tax receipts and reduces the estate/gift tax basic exclusion to $7,000,000, effective Dec 31, 2025.
Official title: To amend the Internal Revenue Code of 1986 to establish the Early Childhood Education Trust Fund consisting of amounts paid for the estate tax and made available to fund child care services, and for other purposes.
Introduced July 10, 2025 by Sara Jacobs · Last progress July 10, 2025
Creates a new Early Childhood Education Trust Fund funded by automatic transfers of 15% of federal estate tax receipts and directs at least 25% of those transfers to child care supply grants to states under the Child Care and Development Block Grant Act; makes trust fund amounts supplemental to existing CCDBG funding and exempts certain award rules. Lowers the federal basic estate/gift tax exclusion from $15,000,000 to $7,000,000 (with other edits to inflation‑adjustment language) for decedents dying and gifts made after December 31, 2025, increasing estate tax revenue that feeds the trust fund.