GOP pushes tax cuts for families, education

The House Ways and Means pushed through expanded tax relief for families and education costs on Wednesday, in the latest battle between Republicans and Democrats over tax cuts.

ADVERTISEMENT
The proposals would consolidate four tax incentives for higher education into a single credit and make more families eligible for the child tax credit — ideas that Republicans said should easily gain bipartisan support.

“This shouldn’t be a huge cause for partisanship,” said Rep. Paul Ryan (R-Wis.).

But Democrats on the committee did oppose the tax proposals, much like they have in two previous mark-ups extending tax cuts. Rep. Danny Davis (D-Ill.), who helped craft the education measure, even voted against that proposal.

Democrats charged the GOP with hypocritically seeking more than $200 billion of unpaid for tax cuts, all while Republicans continue to cast themselves as the party of fiscal responsibility.

They also took issue with some of the substance of the proposals, noting for instance that the proposal to expand the child tax credit would help upper middle-class families more than the poor.

Rep. Sandy Levin (Mich.), the committee’s top Democrat, said the GOP’s push to expand and extend tax cuts for the long-term would add some $825 billion to the deficit.

“That results from just 14 tax provisions,” Levin said. “Imagine what the total will be when Republicans get through the entire tax code.”

Both proposals face serious hurdles in becoming law, as the House and the Senate grapple with the more than 50 tax incentives that expired at the end of last year and as Ways and Means Chairman Dave Camp (R-Mich.) tries to build support for a broader overhaul of the tax code.

Still, the debate over the two measures had a familiar tone, with Democrats like Rep. Richard Neal (Mass.) bringing up the wars in Iraq and Afghanistan and the Bush tax cuts in chiding Republicans for their fiscal priorities.

Republicans, meanwhile, clearly believed they were putting Democrats into a tough spot by getting them to oppose tax breaks for education and families. Camp also pointed out that President Obama had put similar tax cuts into his the latest White House budget without offsets.

“If we pass this bill to help families raise their children, the world as we know it will end,” Rep. Kevin Brady (R-Texas) responded sarcastically to Democrats at one point.

The education tax cut, crafted by Rep. Diane Black (R-Tenn.) and Davis, would consolidate the four separate preferences into the American Opportunity Tax Credit, at a cost of $96.5 billion over a decade.

The revised American Opportunity Tax Credit would be partially refundable — up to $1,500 — with a maximum benefit of $2,500. The first $2,000 of education expenses would be eligible for a 100 percent credit under the plan.

Families making under $180,000 a year would be eligible for the credit, though it starts to phase out at $160,000 a year in income.

The expansion of the child tax credit, from Rep. Lynn Jenkins (R-Kan.), would make it fully available to couples making under $150,00 a year, or double the $75,000 where the credit starts phasing out for single taxpayers.

Republicans said that would end a bias against married couples. Both the $1,000 credit and the phase outs would also be indexed for the inflation.

Democrats said the GOP was wrong to concentrate more on expanding the credit for the upper middle-class than ensuring that expansions that make more working poor families eligible for the tax break don’t expire at the end of 2017.

They also pointed out that some colleges and education groups were concerned that the new American Opportunity Tax Credit could hurt lower-income students.

“I think what we’re doing is reducing America’s competitiveness in the future because we’re not investing in our children. And this is not the way to do it.” said Rep. Lloyd Doggett (D-Texas). 

More in Finance

GOP: Obama tax plan imperils reform push

Read more »