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EDUCATION SHOVED ASIDE: House Passes $550 Billion Tax Plan, Leaves Out Popular Education Initiatives

Last week, U.S. House Education & the Workforce Committee Chairman John Boehner (R-OH) and other members of the House Republican Conference gathered the media to praise schoolteachers for their dedicated service to America’s students, and they highlighted three bills that would benefit the nation’s educators. At the same time, the Republican leadership in the House was agreeing on a tax bill that included none of these provisions. As Ways and Mean Committee members struggled to fit their various tax proposals into the bill’s $550 billion package, they apparently could find no room for teacher tax credits, student-loan-forgiveness proposals, or even a “Crayola” tax credit, which would reimburse teachers for out-of-pocket classroom expenses.

Education Not on the List: Highlights of the $550 Billion House Republican Tax Plan

Provision Cost
Reduce tax rates on capital gains and dividends $277 billion
Accelerate the phase-in of income tax rate cuts enacted in 2001 $74 billion
Accelerate expansion of lowest tax bracket and married couples tax break in 2001 law $62 billion
Accelerate the 2001 law’s child tax credit increase $45 billion
Net Operating Loss carryback $15 billion
Narrow applications of alternative minimum tax $53 billion
Increase investment that small business can deduct as expenses $3 billion
Bonus depreciation for all businesses $22 billion

                   Source: Joint Committee on Taxation

Left Out and Left Behind-Teacher Tax Credits Not Included

Two teacher tax credit proposals enjoy bipartisan support and would benefit educators around the country. The Low-income Educator Assistance and Relief Now (LEARN) Act, or H.R. 1643, a bill sponsored by Rep. Heather Wilson (R-NM), would help hard-to-staff schools in both rural and urban areas attract and retain high-quality teachers.

If enacted, the bill would provide a $2,000 tax credit to any teacher or principal who teaches in a Title I-eligible school (that is, a school in which at least 40 percent of students come from families in poverty), and would cost the federal government $20 billion over 10 years. While LEARNcurrently enjoys the support of 48 cosponsors from both sides of the aisle, it was left behind during consideration of the tax plan. Over the last month, nine cosponsors have been added to the original list of 39: Reps. Joe Baca (D-CA), Judy Biggert (R-IL), Vernon J. Ehlers (R-MI), Barney Frank (D-MA), Jon C. Porter (R-NV), Shelly Moore Capito (R-WV), Bob Filner (D-CA), Amo Houghton (R-NY), and Michael K. Simpson (R-ID). (Complete list of cosponsors).

The second bill, the Teacher Tax Relief Act of 2003, sponsored by Rep. Dave Camp (R-MI), would increase the “Crayola” tax credit, the amount that teachers can deduct for out-of-pocket expenses, from the current level of $250 to $400. It would also allow educators to include professional development costs within that $400 deduction. Under current law, up to $250 is deductible, but only for classroom expenses. Currently the bill has more than 100 cosponsors, both Republican and Democrat. (Complete list of cosponsors).

Loan-Forgiveness Proposals in the House of Representatives

Another proposal featured at Chairman Boehner’s press conference was a student-loan-forgiveness bill introduced by Rep. Joe Wilson (R-SC), which would expand federal student-loan forgiveness-from the current maximum of $5,000 to a new maximum of $17,500-for Americans who teach math, science, or special education in disadvantaged schools. Wilson’s bill currently has 13 cosponsors. (Complete list of cosponsors).

A similar bill, introduced by Rep. George Miller (D-CA), would also expand the federal loan-forgiveness program for teachers to $17,500, but in addition would extend loan forgiveness to college graduates who enter the child care and nursing fields as well as other “high-priority public service careers.” Currently, 65 cosponsors have signed on to Miller’s bill. (Complete list of cosponsors).

Teachers Put on Hold

Research has shown that teacher quality is the single greatest contributor to gains in student achievement. So why are tax credits for teachers left out of the discussion when Congress begins debate on tax plans? The U.S. House of Representatives, despite its strong pro-education and high-teacher-quality rhetoric, still does not seem to see education as a top priority, especially when it comes up against corporate interests.

In the Senate, meanwhile, Finance Committee Chairman Chuck Grassley (R-IA) announced that he would include $20 billion in unspecified aid to states as part of the tax bill currently on the table, but he faces stiff opposition from leading conservatives. For their part, Senate Democrats released a plan that would provide $40 billion to states, including $6 billion for the implementation of the No Child Left Behind Act of 2001 (NCLB). It is too early to tell what the Senate will do with its tax plan, but it does appear that, for now at least, providing incentives for our best teachers to work in high-needs schools will have to wait, and may even become an election issue in 2004.

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