November 6, 2017


AASA Opposes Tax Cuts & Jobs Act, Recommends Improvements

In advance of today's markup of the Tax Cuts and Jobs Act, AASA sent a letter to the House Ways & Means committee to express our opposition to the bill as currently drafted and to recommend improvement. We are deeply committed to ensuring students get the best possible education and support, and the elements of the plan being considered today fall far short of this basic expectation. Specific to the proposal, our concerns fall in three categories: state and local tax deduction (SALT-D), specific education tax provisions (529 accounts) and how pay-fors in the deal will impact education funding. Additional detail can be found in the attached letter. 


  • State and Local Tax Deduction (SALT-D): As one of the six original deductions allowed under the original tax code, SALT-D has a long history and is a critical support for investments in infrastructure, public safety, homeownership and, specific to our work, our nation's public schools. SALT-D prevents double taxation for local residents and reduced the pressure tax payers feel/face when it comes to paying state and local taxes, which represent the lion's share of public education funding. Elimination of this deduction--even the partial elimination in the proposal--would increase tax rates for certain tax payers, reduce disposable income, limit ability and support for local taxes, and damage local, state and national economies. State and local funding accounts for approximately 90% of funding for K12 schools. Reduction of state and local revenues--an all but certain reality under this tax plan--would mean certain cuts to public education. We remain opposed to any changes to the original SALT deduction and urge the Committee to ensure that any comprehensive tax reform must preserve the SALT deduction as a matter of national priority.
  • Privatization and Vouchers: The bill expands 529 accounts to be used for private K-12 educational expenses of up to $10,000. This is a major change from current tax policy where Coverdell accounts, which are income-restricted, were the only tax-free account available to parents for private school expenses. The new bill will enable very wealthy Americans to set aside money for private school expenses furthering the appeal for them to educate their children in private schools. This is a foot-in-the-door approach to vouchers and the revenues that stand to be lost under this 'benefit' would be far more efficiently and effectively invested to support public schools, via federal formula programs like Title I and IDEA, programs driven by equity and working to support teachers and education personnel, to reduce class size, to support instruction and more. AASA is opposed to this expansion of 529 policy and urges the Committee to strike the revision. 
  • Tax Plan Pay For: AASA urges the Committee to ensure that any tax reform act prudently to ensure that tax reform is paid for--not adding to the federal debt--and that in looking for pay-fors, work to preserve parity between defense and non-defense discretionary funding. AASA is concerned that should a tax plan that is deficit-financed move forward, Congress will feel pressure to make cuts elsewhere, and that those cuts will fall to education and non-defense discretionary spending. Congress already struggles to avoid deep cuts to important education programs as they work to comply with existing federal funding caps and constraints; a debt-financed tax reform would only exacerbate this tension and the depth of cuts to important education programs.
We reiterate the importance of Congress ensuring the process of tax reform is deliberate and transparent, and not rushed through for the sake of compliance with arbitrary timelines. We will continue to monitor the broader tax reform effort for its myriad impacts on public education--both long and short term--and we are concerned that the proposal released today ties the hands of state and local governments to support their communities, promotes the privatization of education funding, and attacks, rather than supports, public education in our nation.


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