In today’s knowledge-based economy, you earn what you learn. This places a premium on a post-high school education ― whether it’s four years of college, vocational training or a two-year associate’s degree. As we await the new Republican tax plan, it’s worth considering the ways the House Republican tax bill much of the new proposal will be based on would put such learning increasingly out of reach.
According to the Bureau of Labor Statistics, businesses across the U.S. have approximately 6.1 million good jobs they can’t fill because American workers lack the skills and knowledge required for those positions. As a member of the House Committee on Education and the Work Force, I have been fighting to close this so-called “skills gap.” Working with a Republican co-sponsor, Rep. Glenn Thompson of Pennsylvania, I introduced a bill to strengthen our nation’s career and technical education programs and more closely align them with the needs of local businesses and industries.
Earlier this year, the Thompson-Krishnamoorthi bill passed the House unanimously in a clear message that providing better job opportunities for millions of Americans is not a partisan issue. Moreover, 237 of my House colleagues from both parties – more than half of the Congress – recently signed a letter to Senate leaders requesting quick action on our bill.
Unfortunately, much of this progress could be undone by provisions in the tax reform bill that recently passed the House. Unlike our bill to close the skills gap, the tax bill is highly partisan. It received no input or votes from Democrats during its three-week rush to passage. Even worse, it would end a number of tax provisions for both employers and workers that encourage the education and training that leads to good-paying jobs. These include:
· Repealing the Work Opportunity Tax Credit, which allows employers to write-off 40 percent of an employee’s wages during their first year if they come from a specific group targeted for employment assistance, such as veterans or the disabled;
· Repealing the tax deduction for student loan interest used by 12 million taxpayers annually, adding to the cost of a post-secondary education and the debt many students carry into their careers;
· Repealing the ability of employers to provide $5,250 in tax-exempt funds for the education and training of workers at local institutions, such as community colleges;
· Repealing the Lifetime Learning Credit, which provides a 20 percent credit of up to $10,000 for post-secondary education expenses;
· Ending by 2023 the American Opportunity Tax Credit for qualified education expenses for the first four years of a higher education, including tuition, fees, and books. That credit was enacted as part of President Obama’s anti-recession stimulus bill, and made permanent by the Bipartisan Budget Act of 2015.
Repealing these provisions will make it harder for students from poor or working families to obtain a post-secondary education through a training program or by attending community college. It will hamstring worker retraining that helps employees who lost their jobs to obtain the retraining they need to find new employment. And it will discourage employers from hiring graduates of such programs for the skilled positions they need to fill.
Supporters of the House tax bill contend that the billions in tax cuts for corporations will trickle-down to their workers rather than being paid out in higher salaries and benefits for their executives or in higher dividends to their shareholders. That’s a dubious claim, one not backed up by any evidence. Yet, to keep the cost of these corporate tax breaks under $1.5 trillion, they would end tax breaks for American students and workers attempting to make it to the middle-class.
Not only is this unfair; it’s also unwise. Our best path to economic growth and global competitiveness is to invest in our people – not to provide huge new tax breaks to special interests. Cutting tax credits for education and training will result in more Americans working at minimum-wage jobs while U.S. companies go begging for the higher-paid skilled workers they need.
As the conference committee seeks to blend this legislation with the Senate Republican bill, it is clear that the House Republican tax bill is a tax on America’s future which we simply cannot afford.