INDIANAPOLIS – Congressmen Messer and Rokita showed they’d be willing to make Hoosier college students pay for new tax breaks for the rich by using an inventive array of methods that would have made higher education more expensive in order to pass their initial bill out of the House.
The tax bill that Washington Republicans have been reconciling is nowhere near deficit-neutral, adding as much as $1.7 trillion to the debt in the next decade. Republicans on both sides of the Capitol have combed through traditional Republican bogeymen to find new revenue streams; one of the major sources of revenue that House Republicans relied on to pass their bill last month were students who have enrolled in higher education in hopes of serving as the engine for the next generation of the American economy.
The House Republican plan’s most notable impact would have been its removal of taxpayers’ ability to deduct up to $2,500 in student loan interest from their taxes. However, the bill sought to ferret out every single way to harm students and make education more expensive.
In addition, under the House Republican proposal, reduced tuition for graduate students who work or teach on campus or for university employees would have been newly taxed as income. The same would also apply for reduced or free tuition of children and spouses of university employees. Many schools would no longer have been able to issue federal tax-exempt bonds under the House plan. That in turn would cause an increased budget crunch that would likely be passed onto students in the form of higher tuition, as has been the case at so many public universities in the wake of Republican budget cuts.
Several of proposals harmful to colleges and universities were included in the final tax bill produced by the conference committee between the House and Senate yesterday, including a provision raising taxes on endowments for certain private colleges such as Notre Dame. Even those that were not included in the conference bill will still likely end up on a future chopping block when congressional Republicans look for future sources of revenue for legislation.
The plan has earned the ire of students and universities. Gregory Hess, President of Wabash College, Congressmen Messer’s and Rokita’s alma mater, assailed the House’s proposal in an Indy Star op-ed this morning. “The Tax Reform and Job Acts bills crafted by the House and Senate in recent weeks… seriously jeopardize the quality of education that colleges like Wabash College provide for their students,” Hess wrote. “At the outset, tax reform was designed to help working middle class families; to simplify the tax system; and to add no new taxes. What’s being voted on in Washington next week deviates from those goals in substantial ways.”
“Not only did the bill supported by Congressmen Messer and Rokita seem to exist mainly to fund tax breaks for the wealthy, it would have made it harder for everyone but the children of those same wealthy Americans to afford higher education,” said Will Baskin-Gerwitz, Senior Media Strategist for the Indiana Democratic Party. “Instead of inventing theories about how their tax bill will miraculously spur growth, Republicans ought to retool it to support a tried-and-true method to grow the economy: investing in higher education.”
This release is part of day six of the Indiana Democrats’ 12 Days of Taxes, a daily series highlighting the problems the McConnell tax bill would create if passed this holiday season. While the McConnell plan would raise taxes on middle class Americans to fund more tax breaks for the wealthy and major corporations, its consequences stretch across American life.