ACE President Ted Mitchell sent a letter today to House Speaker Paul Ryan (R-WI) and Minority Leader Nancy Pelosi (D-CA) expressing “grave concerns” about the Tax Cuts and Jobs Act (H.R. 1). The full House is preparing to vote on the measure this week.
ACE and nearly 50 other higher education associations wrote to the House Committee on Ways and Means Nov. 6 as that panel was marking up the bill. As Mitchell told Ryan and Pelosi, all of the concerns the groups outlined in that letter “remain in force.”
The problematic provisions would discourage participation in postsecondary education, make college more expensive for those who do enroll, and undermine the financial stability of public and private, two-year and four-year colleges and universities. The Ways and Means Committee’s own summary of the bill showed that its provisions would increase the cost to students attending college by more than $65 billion between 2018 and 2027.
Among the specific provisions the associations have raised objections to:
- Sec. 1002: Changes to the standardized deduction, which will reduce charitable contributions to our institutions
- Sec. 1002: Repeal of Lifetime Learning Credit, while not substantially increasing the American Opportunity Tax Credit (AOTC);
- Sec. 1204: Repeal of the Student Loan Interest Deduction (SLID);
- Sec. 117(d): Repeal of the qualified tuition reduction;
- Sec. 127: Repeal of educational assistance programs;
- Sec. 1303: Changes to the state and local tax (SALT) deduction, which will reduce state budgets and, in turn, funding for public higher education;
- Sec. 3601: Termination of private activity bonds;
- Sec. 3602 Repeal of advance refunding bonds; and,
- Sec. 5103: Creation of a new excise tax on endowments at private colleges and universities.
The groups also sent a letter to the Senate Finance Committee regarding its version of the tax bill, which the committee began marking up on Monday.
Although that measure retains the student benefits the House bill eliminates, other provisions remain, including those reducing charitable giving, changing the SALT deduction, and creating an excise tax on private colleges and universities.
The Senate bill also would repeal the deduction for personal exemptions, including for college-age dependents. And while it would retain tax-exempt private activity bonds that are particularly important to private colleges and universities, the Senate measure would repeal advance refunding bonds, an important tool for institutions to refinance outstanding debt at lower interest rates, and broaden the tax on Unrelated Business Income (UBIT), increasing the regulatory burden, complexity, and cost. (See Taxing T-Shirt Revenue in Inside Higher Ed for more on this issue.)
For more information and to contact Congress on the Tax Cuts and Jobs Act, see the community’s Tax Reform and Higher Education resource page.