Mr. Speaker, I include in the Record two letters: one from the National Education Association and one from the American Council on Education. November 15, 2017. Dear Representative: On behalf of the three million members of the National…
Mr. Speaker, I include in the Record two letters: one from the National Education Association and one from the American Council on Education.
November 15, 2017.
Dear Representative: On behalf of the three million members
of the National Education Association (NEA), and the 50
million
students they serve, we urge you to Vote No on the Tax Cuts
and Jobs Act (H.R. 1), a rewrite of the U.S. tax code being
voted on this week. This multi-trillion dollar plan is a tax
giveaway to the wealthiest and corporations paid for on the
backs of working families and students, and jeopardizes the
ability of states and local communities to adequately fund
public schools. Votes associated with this issue may be
included in NEA's Legislative Report Card for the 115th
Congress.
Tax plans reveal the priorities of a nation and in a number
of respects this one tells working and middle-class families,
students, and educators that they must sacrifice in order to
further enrich the wealthy and corporations. We oppose the
bill as currently crafted for several reasons outlined below.
A Giveaway to the Wealthy and Corporations sets up Drastic Cuts to
Medicaid, Medicare, and Education
Analysis of the Joint Committee on Taxation's estimate of
H.R. 1's impact shows that the bill is overwhelmingly skewed
to the wealthy. Households with annual incomes over $1
million would receive 16 times the percentage increase in
after-tax income as other taxpayers. In addition, 45 percent
of the cost of the bill's tax cuts would go to households
with incomes above $500,000--less than one percent of filers.
Meanwhile, JCT estimates show that taxes would actually
increase for filers with incomes between $20,000 and $40,000
over the life of the bill.
For now, much of the tax cuts will be deficit-financed, but
the budget resolution that helped pave the way for this plan
previews the next phase: future legislation to cut the
growing deficit caused by tax cuts by demanding cuts to
critical services that help working people, children,
seniors, and others--Medicaid, Medicare, education, and more.
In fact, some of this impact will be immediate. According to
the Congressional Budget Office (CBO), without enacting
subsequent legislation, the tax bill will trigger automatic
spending cuts to pay for the tax changes under a ``paygo''
law. The CBO analysis concludes that Medicare would face an
FY18 reduction of $25 billion with a remaining $111 billion
to be sequestered from remaining mandatory programs.
Kansas provides a window into what this approach looks
like. In 2012, the state's former governor pushed through
similar massive tax cuts to individuals and businesses that
allegedly would boost the economy. In reality, Kansas' job
growth was anemic and the governor and legislature starved
state services. Kansas cut funding for public schools,
infrastructure, and other services, and scrambled to close a
$350-million budget deficit. After voters spoke at the ballot
box, lawmakers reversed course, raising taxes and
overriding--in a bipartisan manner--the governor's veto.
Rather than rushing forward with a partisan bill, Congress
would do well to heed the recent lesson from America's
heartland.
Eliminating SALT Deduction is a Tax Increase and Will Devastate
Education Funding
H.R. 1 would eliminate most of the state and local tax
deduction (SALT)--taking money out of the pockets of as many
44 million middle-class families across the nation. While the
bill hammers middle-class families on this, it oddly
preserves the ability of businesses to deduct state and local
taxes--yet another example of how the bill takes from working
families to provide tax giveaways to those who are wealthier.
Eliminating any part of the state and local tax deduction
could lead to a tax increase on middle class families and
have a negative, ripple effect on the ability of states and
local communities to fund public services, like education.
That could translate into cuts to public schools, lost jobs
to educators, and overcrowded classrooms that deprive
students of one-on-one attention.
NEA conducted a detailed analysis of the plan to eliminate
most of SALT. In total, education funding could take a $250
billion cut over the next 10 years and put up to 250,000
education jobs at risk. It is no secret what is likely to
follow if Congress eliminates SALT. If there is any doubt,
one need only to listen to what far-right groups like ALEC
are saying right now. Their letter about the SALT deduction
lays out their plan--to lobby for lower taxes at the state
and local level. This means even fewer available funds for
students and public education.
Turning Popular 529 College Savings Plan into a Voucher-like scheme for
the Wealthy
The tax plan distorts a popular education tax program for
middle-class families by creating a voucher scheme with no
income limits that is aimed at benefitting the wealthy to set
aside up to $10,000 annually in a tax-free account for
private school expenses. Both the Heritage Foundation and
Education Secretary Betsy DeVos agree, noting to the
Washington Post that the backdoor voucher plan is ``. . . a
good step forward . . .'' in allowing public dollars to
follow children to private school. Make no mistake. This
poorly veiled voucher program will only benefit the
wealthiest families who can already afford private school
tuition at the expense of our students, communities, and
taxpayers. In the end, no matter what form or name a voucher
program takes, the impact is the same. This risky voucher
program will hurt students and neighborhood schools--where 90
percent of children attend.
Elimination of the modest Educator Tax Deduction
While offering huge giveaways for wealthy individuals and
corporations, the plan inexplicably eliminates the popular
educator tax deduction that allows educators to deduct
eligible unreimbursed out-of-pocket classroom spending--
books, paper, pencils, and art supplies purchased to
supplement meager school budgets--up to $250 annually. The
popular plan made ``permanent'' by Congress just two years
ago, was claimed on 3.7 million tax returns in 2015. Almost
every educator pays out of pocket for school supplies. The
most recent study by the National School Supplies and
Equipment Association (NSSEA) estimated that public school
educators spent $1.6 billion of their own money during the
2012-2013 school year on classroom supplies. An estimated 99
percent of public school teachers spent some amount of money
out of pocket for their classrooms, with typical amounts
ranging from $500-$1,000.
Making College Even More Costly for Families
The plan also eliminates the student loan interest
deduction. This is bad news for students and families. Under
current rules, borrowers paying off education loans can
annually deduct up to $2,500 of interest paid on student
loans. H.R. 1 essentially raises the long-term cost of
attending college by eliminating the deductions for interest
paid on student loans. According to the IRS, over 12 million
individuals claimed this deduction in 2015. Further, the bill
eliminates a provision that allows universities to waive
tuition for graduate students. Graduate students would be
taxed on the value of that tuition as if it were income,
making it almost impossible for many students to afford
graduate degrees. In a time of rising college costs and
skyrocketing student loan debt, it is unthinkable to take
away provisions that assists students and families struggling
to pay for college.
Eliminating Successful School Construction Bonds Program
The Qualified Zone Academy Bond (QZAB) Program has proven
to be an efficient and cost-effective way to help
disadvantaged communities address pressing renovation and
repair needs in schools. Investors receive a federal tax
credit equal to the amount of interest payable on the bonds,
thereby relieving local taxpayers and municipalities of the
interest burden. A school that is awarded a QZAB may use the
funds to renovate and repair buildings, invest in equipment,
and update technology which are all vital to student well-
being and success. Eliminating this program will only ensure
that more and more students will go to school in yesterday's
buildings with out-of-date technology and often unsafe,
crumbling infrastructures.
Putting State and Local Public Pensions Funding at Risk
Section 5001 of H.R. 1 could subject certain investment of
state and local government pension plans to the unrelated
business income tax (UBIT). Investment earnings pay for
approximately two-thirds of state and local government
pension benefits, which are taxed when distributed to
participants. In addition to the revenue lost from the tax
itself, subjecting these pension plans to UBIT could pose
significant and complex compliance costs that could
dramatically affect pension funds. Further, the UBIT will
result in a drag on these critically important investment
returns, sets a dangerous precedent for taxation of state
entities, and will ultimately increase costs to taxpayers.
Rewriting the Tax Code Should Not be Rushed
In 1986, Congress undertook a yearlong, bipartisan effort
to deliberately and carefully rewrite the tax code. Measured
consideration should again be taken in understanding the
near-term and long-term impacts a tax code rewrite will have
on families, communities, and public services. Instead,
Congressional leadership is rushing the process and putting
forward a bill that further tilts the scale in favor of the
wealthy and corporations, and paid for by working families.
For all of the reasons outlined above, we urge you to Vote No
on H.R. 1.
Sincerely,
Marc Egan,
Director of Government Relations,
National Education Association.
Mr. Speaker, the Republican tax bill is a dangerous bill that raises taxes on 36 million middle class households; takes healthcare from tens of millions of Americans; skyrockets the cost of health insurance for all Americans, but especially for those who are sick or have preexisting conditions; and directly results in cuts to Medicare and safety net spending next year--all to give corporate special interests immediate, permanent, and monumental tax cuts.
Cut, cut, cut is all that I have heard this week: cut the safety net; cut service for the needy; cut service for the physically challenged; cut the poor; cut the homeless; cut Medicaid; cut education; cut out low-income tax credits; cut out new market tax credits; cut out social services; cut block grants; cut student loans.
Winter is here. Cut the Low Income Home Energy Assistance Program. If you live in Chicago, Minneapolis, the Midwest, or the Northeast, without any heat, you are subject to catch pneumonia and die. There is no doubt about it.
I can imagine that college residents, hospital administrators, and managers of programs are wringing their hands, wondering what they are going to do.
I heard a minister last Sunday at one of the churches in my community asking this, and he said: Pray, organize, vote.
Vote against this bill.