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Where the House and Senate GOP Tax Bills Differ on Education

By Andrew Ujifusa — November 29, 2017 3 min read
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It’s crunch time for the Republican tax overhaul bills. But will education and educators get squeezed when the clock expires?

GOP senators are trying to reach a final vote on a tax package in the next few days. Then they can huddle with House Republican lawmakers—who have already passed their own tax bill—and hammer out a final bill to take back to each chamber. Ideally they want to finish work and send a bill to President Donald Trump before Christmas. But right now, the bills don’t treat K-12 issues exactly the same. Here are a few key differences between them.

1. The Classroom-Expenses Deduction

This is probably the provision of the tax bill that has educators riled up the most. The House bill would eliminate the $250 deduction teachers, principals, and others can take for when they spend their own money on classroom supplies. The Senate bill, however, would double that deduction to $500. Sen. Susan Collins, R-Maine, a key vote in tax reform, introduced the deduction into the tax code about 15 years ago.

The deduction in current law is structured so that educators don’t need to itemize their taxes in order to claim it.

Click here to watch a video about that deduction and other issues impacting teachers in the House bill.

2. School Choice

The House bill would alter 529 college savings plans to allow parents to use them for K-12 expenses, including for private school tuition. This change isn’t in the Senate bill, although two senators offered amendments to expand school choice through different means.

If the provision in the House legislation becomes law, it would be the first federally backed expansion of school choice since President Donald Trump and U.S. Secretary of Education Betsy DeVos took office. However, even some school choice advocates think that the move could primarily benefit pretty wealthy families, and not low-income parents who they said need more help accessing good school options.

3. State and Local Taxes

The House bill would still allow people to deduct up to $10,000 in local property taxes. And in a late change Friday, the Senate bill also allows $10,000 in property tax deductions. Based on the new Senate legislation, the two bills are actually now closely aligned on this front.

Several public education advocacy groups are alarmed that if some or all of the state and local deductions end, state and local governments in turn could cut their own support for education in order to reduce the overall tax burdens on their residents. However, it’s worth noting that both House and Senate bills double the standard deductions individuals and married couples can take. This might ease the pressure on state and local officials to cut their tax rates and thus the revenue available to K-12.

4. Child Tax Credit

The House tax bill would increase this tax credit from its current level of $1,000 up to $1,650, while the Senate bill would double it to $2,000.

The Senate Finance Committee said the increased tax credit would help provide significant tax relief to working- and middle-class families. The committee said a family of four earning $73,000 a year, for example, would see a tax cut of $2,200, while a single parent with one child earning $41,000 a year would get a $1,400 tax cut.

However, critics of the GOP tax proposals say both the House and Senate proposals would exclude many children from low- and middle-income families from seeing the full benefit of the increases to the child tax credit.

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Photo: U.S. Sen. Susan Collins speaks at a forum on tax reform at Volk Packaging, on Nov. 10 in Biddeford, Maine. (Robert F. Bukaty/AP)

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