Among the other last-minute amendments scribbled into the margins of the Senate Republican tax plan is a DeVosian sop to rich folks sending their kids to private school. Thanks to a tie-breaker vote from Vice-President Mike Pence, Senator Ted Cruz won an amendment that grants a tax deduction for private K-12 school tuition:
Meanwhile, the bill expands the use of “529 plans” to include private schools. These savings plans were designed to encourage families to save for college, and work in part because they’re tax free—earnings from them that are spent on tuition are not subject to any federal tax. The new GOP bill expands these plans to include elementary and high schools, which means tuition payments towards private schools are now tax free [Heather Timmons, “The Republican Tax Bill Punishes Families Who Use Public Schools,” Quartz, 2017.12.02].
At the same time, the Senate joined the House in removing the ability of individuals (not corporations) to deduct state and local income and sales taxes and capping the property tax deduction at $10,000. Restricting that deduction will hurt public schools and other local services:
Eliminating the SALT deduction would ultimately lead to greater budget challenges at the local level. The result is basic economics: A loss of the SALT deduction would lead to increased pressure on state and local governments to lower tax rates — citizens would be unhappy with higher federal tax bills and would look for tax relief from local governments. Of course, that pressure could lead to declines in local tax revenue, which would further constrain counties, cities and school districts’ ability to provide the essential public services we all rely on.
The losses would be significant and real: Think of the roads, schools, public safety work, human services and so much more. The elimination or rollback of SALT at a time when federal revenues are sharply curtailed by corporate tax cuts would likely result in fewer federal investments in services at the state and local levels [Jim McDonough and Peter McLaughlin, “Federal Tax Reform: Eliminating State and Local Deduction Would Hit Minnesota Hard,” Minneapolis StarTribune, 2017.11.15].
The Government Finance Officers Association estimates that, for one Texas Congressional district, each dollar of increased federal tax caused by the GOP tax plan’s restriction of the state and local tax deduction could push local schools to cut their spending by 41 cents. If that math holds up for other districts, then in South Dakota (where, as Governor Daugaard noted on WNAX, the state and local tax deduction affects the lowest percentage of tax units), unSALTed taxpayers (out of 412,000 individual filers total) local schools could cut spending by $42 million.
With their votes for the GOP tax plan, John Thune, Mike Rounds, and Kristi Noem are incentivizing private schools while making it harder for public schools to raise the money necessary to serve all children.
Of course. In a tax plan that is all about the wealthy holding on to what is theirs, that philosophy trickles down to specific elements of taxation and spending. The wealthy do not want to pay for schools to support their communities, they want to pay for ONLY their kids’ schools (which are not open to the community).
Above and beyond the bad economics of the new tax legislation, it is an erosion of the whole notion of a public good and the responsibility of citizenship. A nation that serves only selfishness cannot endure.
As O notes, this tax plan is a frightening money grab, a consolidation of power by the wealthy. Perhaps they realize the GOP/patriarchy’s days are numbered, and they are making one last desperate bid to institute racial and economic apartheid.