White House Bill On Tax Credits Expected Soon
Washington--Members of President Ronald Reagan's Cabinet have given their approval to a proposal to grant income-tax credit to parents who pay private-school tuition, Administration sources said last week.
With Cabinet approval of the measure, "introduction of the bill is imminent," said one Administration source, who asked not to be identified.
The tuition tax-credit proposal was voted on during a meeting of the full Cabinet on March 18, the sources said. It reportedly was prepared by a working group of officials from several agencies, headed by Shannon Fairbanks, a White House senior adviser on domestic policy.
Ms. Fairbanks was unavailable for comment about the tax credit proposal. A White House spokesman confirmed only that an education-related issue had been discussed at the Cabinet meeting.
The controversial plan, which has been a topic of debate in the Congress since 1969, would make the tax benefit available beginning in the fiscal year 1984, sources said.
Although some provisions of the bill remain to be decided, the sources said the Administration's proposal will be similar to several tuition tax-credit bills introduced by legislators in the past several years.
The benefit would be available only for parents of students in elementary and secondary schools, the sources said. The amount of the tax credit would be "phased in" over a period of several years, beginning with a credit of less than $250 for tuition paid in the calendar year 1983 and possibly rising to as much as $1,000 per year for each child, the sources said.
Like the so-called Packwood-Moynihan bill--the most widely discussed tuition tax-credit bill, named for Senator Robert Packwood, Republican of Oregon, and Senator Daniel P. Moynihan, Democrat of New York--the Administration's proposal would seek to prohibit tax credits for parents who send their children to schools that discriminate on the basis of race.
Sources said the Administration's bill would tie the tax-credit provision to the granting of tax-exempt status to private schools by the Internal Revenue Service (irs).
The irs tax-exemption issue, which has been a recent source of controversy between the Administration and the Congress, may be resolved by Congressional passage of a proposed joint resolution that would give the irs specific authority to deny tax exemptions to discriminatory private schools under Section 501(c)3 of the irs code.
The tax-exemption issue is also the subject of a lawsuit that is currently before the U.S. Supreme Court. (See Education Week, March 3.)
The sources said the Administration had intended to introduce the tax-credit bill later this year--possibly after the 1982 Congressional elections--but that Administration officials made the decision to move up the date of the bill's introduction after receiving protests from supporters of tuition tax credits.
Several of the bill's Congressional supporters, prompted by the lobbying efforts of the U.S. Catholic Conference and other private-school organizations, wrote to President Reagan on Feb. 26 to request that the Administration act on the proposal.
A letter circulated by Republican Representative Thomas J. Tauke, who represents a northeastern Iowa district with a large Catholic population, asked the President to "act promptly to formulate a recommendation on tuition tax credits for submission to Congress."
"Many of our constituents are convinced that tuition tax credits will permit their schools to survive and allow them to continue to send their children to these schools. ... It is apparent that no action will be taken on tuition tax credits unless you, Mr. President, push the issue," the letter continued.
Eight other Republican members of the House also signed the letter. They are: John M. Ashbrook of Ohio, Daniel R. Coats of Indiana, Joel Deckard of Indiana, Charles F. Dougherty of Pennsylvania, John LeBoutillier of New York, Marge Roukema of New Jersey, Eldon Rudd of Arizona, and Mark Siljander of Michigan.