Amendments to Senate Tax Cuts and Jobs Act (H.R. 1)

Multiple key votes are possible throughout the amendment process. Because the rules governing the Senate’s budget consideration are complex, amendment votes often occur without notice. As a result, Heritage Action may not release key votes in advance during the vote-a-rama. Follow Heritage Action on Twitter throughout the debate to get information on pending amendments.

Heritage Action supports Toomey-Cruz #1690 to make the underlying bill’s endowment tax applicable only to colleges receiving Title IV money.

Heritage Action will key vote the following amendment(s) to the Senate Tax Cuts and Jobs Act (H.R. 1).

Key Vote Alert: “NO” on Reinstating a Property Tax Deduction of up to $10,000 (Sen. Amendment #1590)

The Senate could vote on an amendment (#1590) offered by Senator Susan Collins (R-Maine) to the Tax Cuts and Jobs Act (H.R. 1) that would reinstate a property tax deduction of up to $10,000 for a married couple. This amendment would not only redistribute federal taxpayer dollars to wealthy individuals in high-tax states who itemize their deductions, but also increase the score of the Republican tax reform package thus undermining other positive provisions within the bill.

Adam Michel, Policy Analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, explains the negative effects of adding a property tax deduction back into the tax reform legislation in a recent article entitled “4 Ways the Senate Could Ruin Good Tax Reform.” He writes:

“Tax reform should fully repeal the state and local tax deductions and use the savings to lower tax rates. The Senate bill improves on the House bill by eliminating a retained $10,000 property tax write-off. The Senate should not put this subsidy for the wealthy and high-tax state governments back into the bill. The state and local tax deductions are detrimental to the economy. They encourage higher state and local government taxes and shift those increased burdens from high-tax, high-income Americans to low-tax, low-income folks. Reinstating a property tax deduction is costly and could thus undermine other aspects of the tax reform.”

Senate Republicans were wise to eliminate all state and local tax (SALT) deductions in the Finance Committee’s tax reform proposal so that they could use the savings to lower tax rates across the board. Senate Republicans should stick to their initial position and reject any amendments that would reinstate property tax deductions, including Sen. Amendment #1591.     

Heritage Action opposes the Collins Amendment and will include it (or a similar amendment) as a key vote on our legislative scorecard.

Daily Signal: 4 Ways the Senate Could Ruin Good Tax Reform
Heritage Foundation: Why Tax Reform Should Eliminate State and Local Tax Deductions

Key Vote Alert: “YES” on Expanding 529 Plans to K-12 Private School Tuition and Homeschool Expenses (Sen. Amendment #1725)

The Senate could vote on an amendment (#1725) offered by Senator Ted Cruz (R-Texas) to the Tax Cuts and Jobs Act (H.R. 1) that expands higher education savings plans to include K-12 private school tuition and homeschool expenses. This amendment would help expand school choice by allowing families to use 529 account funds to help pay for private elementary and secondary education, including homeschooling.

The federal government currently provides tax advantages for families saving for college tuition and other higher education expenses. This incentive, known as a Section 529 savings plan, allows money to grow tax-free, without incurring federal tax penalties. Under the Cruz Amendment (as in the House-passed version of H.R. 1), elementary and high school (K-12) expenses of up to $10,000 per year would be qualified expenses for Section 529 plans. Additionally, the Cruz Amendment would include the benefit to homeschool students, which was overlooked in the House bill.

As The Heritage Foundation has previously written, this relatively small change to federal tax law could have major implications for school choice. Since most states have either tax credits or deductions to encourage saving in a 529 college plan, revising Section 529 to include K–12 expenses would likely encourage states to allow parents to deduct their contributions to 529 plans from their state income tax obligations, in order to encourage saving for K–12 education costs.

Lindsey Burke, Director of the Center for Education Policy and Will Skillman Fellow in Education at The Heritage Foundation, summarizes this policy a recent article entitled “GOP Tax Proposal Would Advance Education Choice.” She writes:

“Expanding section 529 of the Internal Revenue Code to allow families to contribute money to 529 plans for K-12 educational expenses would enable families to save for K-12 education-related expenses while increasing their ability to pay for education options outside the public school system.”

Heritage Action supports the Cruz Amendment and will include it as a key vote on our legislative scorecard.

Heritage Foundation: GOP Tax Proposal Would Advance Education Choice
Heritage Foundation: Continuing the School Choice March: Policies to Promote Family K–12 Education Investment