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Raging Tax Debate Sucks In Teachers' Deductions, School Choice

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Congressional debate over the Republican-backed proposal to change the tax code is under way in Congress, and education issues are getting a share of the spotlight.

The tax overhaul proposed by House Republicans last week, officially titled the Tax Cuts and Jobs Act, would end the $250 deduction that teachers can claim on their income taxes for money they spend on classroom supplies. The bill, released last Thursday, would also end the deduction individuals can take on interest they pay on their student-loan debt, and expand the allowable uses of 529 college savings plans so that parents and others could use the money for K-12 expenses, including for private school tuition. 

More generally, the reductions in income tax rates could put some more money in the pockets of people at certain income levels, including teachers. Obviously, much would depend on teachers' total household income, how many children they have, and other factors. The size of the tax cuts would also decline over several years, because of congressional rules for the legislation.

During a hearing in the House Ways and Means Committee on Monday, Democrats and Republicans argued fiercely about the pros and cons of the bill, which Republican leaders on Capitol Hill have said they want to pass by the end of 2017.

Rep. Erik Paulsen, R-Minn., touted the broad benefits of the bill and at one point said, "This bill helps teachers." And Rep. Jackie Walorski, R-Ind., noted that tax incentives for education were streamlined in the bill, which would allow parents "to figure out what works and what doesn't" for their child's educational needs without wading through a stack of papework. (The tax bill also ends Coverdell accounts, which are tax-deferred plans that allow parents to save money for K-12 expenses.)

But Democats railed against the legislation, and in the process tossed out some criticisms of the bill's potential impact on schools and educators.

"How can we punish teachers who are just trying to buy supplies for their classrooms?" said Rep. John Lewis, D-Ga., referring to the end of the $250 tax deduction for classroom supplies. 

And Rep. Joseph Crowley, D-N.Y., quizzed the Joint Committee on Taxation Chief of Staff Thomas Barthold (who testified at the hearing) about whether the change to 529 plans would allow the savings to be spent on "horse-jumping" lessons at a private school. Crowley ultimately concluded that it would be allowed. 

In addition, the tax bill would end several deductions taxpayers can claim for state and local taxes. That could put a squeeze on some schools' revenue sources.

Image: Screen capture of Rep. John Lewis, R-Ga., during consideration of the GOP-backed legislation to change the tax code in the House Ways and Means Committee on Nov. 6, 2017. 

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