Davis discusses tax reform on a call with members of his Higher Education Advisory Board
from his Washington, DC office.
U.S. Rep. Rodney Davis (R-Ill.) today sent a letter to the Committee on Ways and Means urging support for expanding tuition assistance and preserving qualified tuition reductions. The committee is currently considering H.R. 1, the Tax Cuts and Jobs Act, to overhaul our tax code for the first time since 1986.
Davis’ letter urges the Committee on Ways and Means to reconsider the repeal of the employee tuition assistance program and instead asks the committee to consider expanding it to allow employers to use this benefit to help employees pay down existing student loan debt. A provision Davis has fought for with his bill, H.R. 795, the Employer Participation in Student Loan Assistance Act.
“There is no doubt that by lowering overall rates, doubling the standard deduction, and expanding 529 plans and the child tax credit, this bill will allow the majority of Americans keep more of what they earn to put towards education costs and other needs,” said Davis. “But as the member of Congress representing eight colleges and universities, I believe there are a couple of changes that could be made to specifically help address student debt and access to higher education. Student debt in this country has surpassed $1 trillion nationally and is now the second highest form of consumer debt just behind home mortgage debt. While we can’t solve the student debt crisis through tax reform, I continue to urge my colleagues, both on and off the committee, to look for ways we can begin to address what I believe could be this country’s next financial crisis.”
Additionally, Davis suggests that the committee retain the exclusion of qualified tuition reductions from income that many university employees and graduate students in the 13th District use.
“That building services or mid-level clerical worker who has worked the same job at the university for 20 years just to afford a college education for their kid or the many graduate assistants teaching in exchange for tuition should be taken into consideration when discussing the qualified tuition reductions,” said Davis. “I’m urging my colleagues to take a second look at eliminating this exclusion. Now is the time for all Democrats and Republicans to engage in the process and provide input on one of the most important bills we will ever work on in Congress.”
Following a call this morning with his Higher Education Advisory Board, which includes a representative from all eight colleges and universities in the 13th District, Davis sent the following letter to the Committee on Ways and Means:
November 8th, 2017
The Honorable Kevin Brady
House Ways & Means Committee
1102 Longworth House Office Building
Washington, DC 20515
Dear Chairman Brady,
I commend your efforts to create a tax system that will benefit middle-income families throughout my district by allowing them to keep more of what they earn. Your focus on lowering rates, doubling the standard deduction, and expanding the child tax credit is a great start to changing their lives for the better.
As Members of Congress, we can make an even bigger impact by taking this opportunity through tax reform to confront the impending student debt crisis and to address access to higher education. With eight colleges and universities located within my district, I am committed to addressing these issues and hope you will consider my suggestions.
Section 127 of the Internal Revenue Code (IRC) incentivizes an employee to accept tax-free qualified educational assistance from an employer as a means to further the employee’s education and obtain skills to thrive in the workforce. Since 2014, I have championed the importance of this benefit and have attempted to expand it through my bill, H.R. 795, the Employer Participation in Student Loan Assistance Act. Seven in ten college seniors graduate with student loan debt – which now represents the second highest form of consumer debt. This debt harms our economy because it prevents many young adults from buying a house, purchasing a car, or saving for retirement. For this reason, I ask that you consider retaining this exclusion in tax reform and expand it to include H.R. 795.
Additionally, repealing Section 117(d) of the IRC will eliminate a taxpayer’s ability to exclude qualified tuition reductions from income and will raise the barrier of entry to college for many individuals. Colleges and universities throughout my district provide employees – as well as their spouses and dependents – with tuition reductions. By repealing this provision, middle-income individuals who rely on these reductions to obtain a college degree will be forced to pay taxes on amounts they never actually physically possess. These individuals include the children of janitors who ensure facilities are in working order, or the spouses of university police officers who provide safety to our students. Repeal of this exclusion will place an unnecessary burden on these taxpayers whose only ability to attend college is often through receipt of qualified tuition reductions. As such, I ask that you retain this exclusion in tax reform.
The task before Congress in reforming our tax code will not be easy and I commend you in your efforts. I thank you for your consideration of my suggestions, and look forward to working with you and our colleagues in creating a tax system that provides our constituents with the greatest opportunity to succeed.
Member of Congress