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MICUA Matters Newsletter

Oppose Tax Reforms that Undercut Students

The Tax Cuts and Jobs Act passed by the U.S. House in November provides massive tax cuts for some while increasing college costs for students and families by $71 billion. The bill eliminates student loan interest deductions, abolishes Coverdell tax-preferred college savings accounts, and jettisons the Lifetime Learning tax credits. Furthermore, the bill requires workers to pay taxes on tuition assistance and remission benefits. These benefits are most valuable to entry-level workers, low-wage earners, and graduate students who must improve their skills and knowledge to move up the career ladder.

Fall 2017

The Tax Cuts and Jobs Act passed by the U.S. House in November provides massive tax cuts for some while increasing college costs for students and families by $71 billion. The bill eliminates student loan interest deductions, abolishes Coverdell tax-preferred college savings accounts, and jettisons the Lifetime Learning tax credits. Furthermore, the bill requires workers to pay taxes on tuition assistance and remission benefits. These benefits are most valuable to entry-level workers, low-wage earners, and graduate students who must improve their skills and knowledge to move up the career ladder.

At the same time, the bill costs nonprofit colleges and universities billions by creating an excise tax on endowment earnings, imposing new taxes on unrelated business income, and changing the tax status of private activity bonds. These policies make higher education less affordable; decrease access for economically disadvantaged students; and reduce basic and applied research activities that create jobs, improve health, and make us safer at home and abroad. At a time when the entire nation is concerned about college affordability and student loan debt, Congress is moving in the wrong direction by making it harder for families to afford an education, saddling students with more debt, driving up costs for nonprofit institutions, and sabotaging public-private partnerships that reduce taxpayer costs.

Americans excel as innovators, entrepreneurs, skilled laborers, and knowledgeable professionals. At a minimum, the tax reform legislation must protect investments in the nation’s knowledge-based economy and its future generations. Congress should support tax reforms that: (1) reward businesses that invest in workers; (2) make colleges more affordable; (3) expand research and development activities; and (4) prepare American workers to compete on the world stage. — by Tina Bjarekull, President of MICUA

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