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Tax Code Changes Undercut Public Schools and Teachers… Help the Profiteers

November 7, 2017

Diane Ravitch reprinted a memo from James Harvey, CEO of the National Superintendents Roundtable that is pasted below in full:

The House GOP unveiled a 429-page tax reform bill late this week that lowered the corporate tax rate from 35 to 20 percent, raised the standard deduction, and sought to keep lost revenue down to $1.5 trillion by eliminating dozens of deductions now available in the existing tax code. Several press accounts document the profound impact these changes will have on students, families, and educational institutions. Here’s what’s on the chopping block:

Existing Tax Code 

Deduction for interest on student loans

Deduction for college tuition

Business deduction for employees’ tuition

Coverdell Education Savings Accounts*

Section 529 college savings accounts*
Add K-12 private schools

$250 teacher deduction for supplies

Deduction for state sales taxes**

Deduction for state/local income taxes**

Deduction for property taxes**
Cap at $10,000

* Coverdell Education Savings Accounts are tax-free accounts for middle- and lower-income families to pay up to $2,000 for qualified education costs, including college costs and some private K-12 expenses. Although eliminating this vehicle, the House GOP package simultaneously extends the existing Section 529 college savings program to permit all parents, no matter how wealthy, to set aside up to $10,000 tax-free for K-12 private schools.

** These income sources at the local level are the foundation of school funding. Limitations on these features will make passage of school levies and bonds more difficult, as voters realize their state and local taxes can no longer be used to off-set their federal tax liabilities and that they will be taxed on taxes already paid.

Each of these has the effect of increasing the taxes collected by the federal government at the expense of either parents, teachers, school districts, and state and local governments. And why does the federal government need additional money from these groups? To provide more tax breaks for shareholders, billionaires, and privatizers. Welcome to the plutocracy.

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