Mr. President, I rise today to introduce legislation designed to increase tax fairness for America's primary and secondary school teachers. Our public school teachers are some of the unheralded…
Mr. President, I rise today to introduce legislation designed to increase tax fairness for America's primary and secondary school teachers.
Our public school teachers are some of the unheralded heroes of our society. These women and men dedicate their careers to educating the young people of America. School teachers labor in often difficult and even dangerous circumstances. In most places, including in my home state of Utah, the salary of the average public school teacher is significantly below the national average.
For a variety of economic and organizational reasons, schools across the nation are experiencing difficulties in recruiting teachers-- especially in the fields of math and science. There are at least two sources to this problem. First, schools are experiencing high levels of turnover related to retirement, relocation, and attrition. Second, there is an insufficient supply of new qualified math and science teachers coming in to the schools to compensate for the turnover.
As a result of these factors, 31 percent of secondary schools across the nation report difficulties in filling math and science faculty positions. This teacher recruitment problem is especially troubling because it disproportionately affects small schools in urban and rural areas, especially those with limited access to funding.
Unfortunately, the problems of retention and recruitment of public school teachers are exacerbated by the unfair tax treatment these professionals currently receive under our tax law. Specifically, teachers are greatly disadvantaged by the lack of deductibility of the total amount of out-of-pocket costs of classroom materials that practically all teachers find themselves supplying, as well as by the inability to deduct their professional development expenses. Let me explain.
As with many other professionals, most elementary and secondary school teachers regularly incur expenses to keep themselves current in their fields of knowledge. These include subscriptions to journals and other periodicals as well as the cost of courses and seminars designed to improve their knowledge or teaching skills. For example, in order to be certified by the National Board for Professional Teaching Standards, NBPTS, a teacher must pay a fee of $2,500. Expenditures like these are necessary to keep our teachers up to date on the latest ideas, techniques, and trends so that they can provide our children with the best education possible.
Furthermore, almost all teachers find themselves spending not insignificant amounts of money to provide basic classroom materials for their students. Because of tight education budgets, most schools do not provide 100 percent of the material teachers need to adequately present their lessons. New teachers in their first and second years are especially susceptible to a large financial burden as they must start from scratch in establishing a curriculum and classroom for their students.
I realize that employees in many fields incur expenses for professional development and out-of-pocket expenses. In many cases, however, these costs are reimbursed by the employer. This is seldom the case with school teachers. Other professionals who are self-employed are generally able to fully deduct these types of expenses.
Under the current tax law, unreimbursed expenses for all employees are deductible generally, but only as miscellaneous itemized deductions. However, there are two practical hurdles that effectively make these expenses non-deductible for most teachers. The first hurdle is that the total amount of a taxpayer's deductible miscellaneous deductions must exceed 2 percent of gross income before they begin to be deductible.
The second hurdle is that the amount in excess of the 2 percent floor, if any, combined with all other deductions of the taxpayer, must exceed the standard deduction before the teacher can itemize. Only about one-third of taxpayers have enough deductions to itemize. The unfortunate effect of these two limitations is that, as a practical matter, only a small proportion of teachers are able to deduct their professional development and out-of-pocket supplies expenses.
Let me illustrate this unfair situation with an example. Let us consider the case of a first-year teacher in Utah, whom we will refer to as Michelle. Michelle is newly married. She and her husband together expect to earn $48,000 this year. As a brand-new teacher, Michelle has none of the classroom decorations, materials, or curriculum aides that veteran teachers have accumulated. In an effort to quickly collect some necessary items for her classroom, a new teacher like Michelle will probably spend close to $1,500 of her own money. She will not be reimbursed for any of these expenses by the school district.
Under current law, Michelle's expenditures are deductible, subject to the two limitations I mentioned. The first limitation is that her expenses must exceed 2 percent of her and her husband's joint income before they begin to be deductible. Two percent of $48,000 is $960. Thus, only $540 of her $1,500 total expense is potentially deductible-- that portion that exceeds $960.
As a married taxpayer, Michelle's standard deduction this year is $11,400. Her total itemized deductions, including the $540 in qualified miscellaneous deductions for her professional expenses and out-of- pocket classroom supplies, will fall far short of the standard deduction threshold. Therefore, not even the $540 of the original $1,500 in out-of-pocket costs is deductible for Michelle. What the first limitation did not block, the second one did, and Michelle gets no deduction at all for these expenses under the current law.
The entry-level employees in the teaching field are the first- and second-year teachers like Michelle, who receive the lowest relative salary and yet often incur the greatest school-related expenses. These expenses place a heavy burden on our teachers and can act as a significant barrier to entry to the teaching profession. Many of these new teachers are renting and fresh out of college, and are thus very unlikely to be able to itemize their deductions. Therefore, without the ability to itemize, the teachers with the greatest need of tax relief are the ones least likely to receive it.
This problem is not isolated to first-year teachers. Veteran educators, like Kristen Adamson, also an elementary school teacher in Utah, have also expressed their concerns about this tax inequity. Kristen is preparing for a class of 35 fifth-graders next year--the most she's ever had. She, like most teachers, feels that it is her duty to provide all of her students with the materials they will need to successfully complete their school work. There are few careers that I know of in which employees take similar initiative.
This year, due to limited state funding, Kristen will be forced to choose between a class set of colored pencils or a class set of crayons. Whatever the district does not provide, Kristen will be forced to purchase herself. Further, the school district provides only one
notebook per student, but her pupils require a minimum of four each to organize their work. With 35 students, these costs can add up very quickly. Kristen typically does not have enough deductions to itemize and therefore, like most teachers, will receive little or no tax relief.
As you can see, public school educators are at a marked disadvantage under the current tax law, and they deserve better treatment. Not only is the situation morally unacceptable, it is aggravating to our teacher retention and recruitment problems.
I have been fighting to pass legislation that will help alleviate this long-standing problem for almost a decade. In 2001, I first introduced the Tax Equity for School Teachers Act. This legislation would have provided an unlimited tax deduction for the out-of-pocket expenses school teachers incur to acquire necessary training and materials.
Rather than being available only to those who are able to itemize their deductions, this bill would have made these expenses ``above-the- line'' deductions, meaning they would be deductible whether or not the teacher itemized on their tax return.
Unfortunately, only a part of this bill was enacted. The 2001 tax act included an above the-line deduction for $250 for the costs of classroom expenses. While this was a step in the right direction, it was essentially a symbolic gesture as teachers typically spend far more than $250 on school-related expenses. This deduction has expired and has been renewed several times, but it expired again at the end of last year. It is not clear when Congress is going to extend it.
The bill I am introducing today would do three things. First, it would reinstate the above-the-line deduction for teachers' out-of- pocket expenses for classroom supplies, make it permanent, and remove the $250 cap. Second, it would provide an unlimited deduction for the professional development expenses for school teachers. Finally, to assist in the recruitment of teachers in the most-needed fields, it would provide an unlimited deduction for the cost of professionals in the fields of math, science, and technology to certify to become public school teachers.
Under my bill, first-year teacher Michelle would be allowed to deduct all $1,500 of her professional development and classroom supplies expenses, whether she itemized or not. Similarly, Kristen would be able to deduct all of the expenses she incurred to provide materials for her students. This would help provide tax equity and a measure of much- needed tax relief for scores of underpaid professionals. It would also help retain current public school teachers and attract new ones to the field.
Some might argue that such a generous deduction would be giving teachers preferential treatment. I disagree. Most organizations provide training and supplies for their employees that are fully deductible to the organization and non-taxable to the employee. Yet, public teachers pay for training out of their own pocket, as is the case with NBPTS certification.
Others may question the wisdom of my bill granting an unlimited tax deduction. Why not place a limit or cap on the amount that may be deducted, some might ask. Again, I respectfully disagree with such critics. It is important to keep in mind the difference between a tax deduction and a tax credit. My bill calls for tax deductions, which essentially act as a cost-sharing arrangement between the teacher and the government. Deductions reduce the amount of income that is subject to tax. A credit, on the other hand, is a dollar-for-dollar reduction in the amount of tax that is due.
With a tax deduction, a public school teacher is not receiving a cash subsidy or reimbursement for his or her expenses. Rather, he or she is merely obtaining a reduction in the amount of income that is taxed. Thus, the most benefit a teacher would receive under my bill would be a 35 percent reduction in the cost of professional development, supplies, or certification expenses. For the vast majority of teachers, the amount would be far less than 35 percent, because they are in lower tax brackets. This means that the teacher is still responsible for paying for the biggest portion of these costs. In other words, this bill does not provide an incentive for teachers to spend unnecessary funds; it simply provides a discount for teachers who use their common sense and spend their money appropriately. If anything, this deduction is not generous enough, but it would go a long way toward providing help for these dedicated professionals.
Support for mathematics and science education at all levels is necessary to improve the global competitiveness of the United States in science and energy technology. I endorse the efforts of some of my colleagues to encourage more of our best and brightest students who choose these fields of study. Sup ort for qualified STEM teachers, Science, Technology, Engineering, and Mathematics, is equally important. If we are successful in increasing the supply of STEM students, we will need to take drastic measures to increase the already strained supply of STEM teachers. This bill would provide incentives for these professionals to enter the teaching profession by allowing expenses in connection with teacher licensing and certification to be fully deductible, above the line, the same as professional development and supplies expenses of teaching professionals.
This bill would provide modest tax relief for teachers who, for too long, have been treated unfairly under our tax laws. It would alleviate significant barriers to entry to the teaching profession and would help solve some of our teacher recruitment and retention problems. Our teachers deserve whatever help we can provide. It is time that Congress recognized this unfairness and corrected it. I thank the Senate for the opportunity to address this issue today, and I urge my colleagues to support this legislation.
Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.