I have also heard that this is a reason why childcare is so expensive relative to a primary caregiver staying at home. I'm trying to remember the details - it was something like:

- When you purchase child care, you pay sales tax

- The childcare company pays payroll tax on salary paid to its employees.

- The childcare employees pay income tax on their salary

- The corporation also pays corporate tax

- Company owner pays income tax on any income they take, and/or capital gains tax

Every dollar you spend purchasing childcare from others is taxed multiple times before it reaches actual stakeholders who deliver the service. Since each of the actors involved seeks a certain after-tax benefit (e.g. company owner needs profit for the venture to be worthwhile; childcare worker needs sufficient salary), this means that all of the taxes must be part of the price for childcare that's charged to customers. Thus childcare is expensive relative to staying home and providing it yourself, in large part due to the multiple layers of taxation.

Someone who is familiar with the details better than I could estimate what percentage of each dollar spent on childcare goes to the government as tax - when I was reading about this, I think the number I saw was around 60-75%. When you think of it in these terms, feels extreme how much of the economic value of these transactions is taxed and captured by the government, and therefore driving up the costs for everyone.