I think it would be much better to provide a one year paid stipend so that a parent can be home with the children during their tender years.
This entire structure is set up to keep the boss happy while a stranger raises your child during their most formative and vulnerable years.
If the government also runs daycare centers that adds another option of taking your child to gov daycare. It also forces the gov and private daycares to compete.
The current policy penalizes people on the margin-- maybe an extra $500/mo would get your child much better daycare, but you're stuck between (likely) low quality government care, or losing a huge chunk of income to solve the problem yourself.